It controls if the event will bubble up or down the DOM tree.
Click on three in the example below (and linked here). Then change false to true and repeat.
If useCapture is set to false, it will bubble up the tree and you will get x3, x2, x1, if it is set to true, it will bubble down and you will get x1, x2, x3.
See:
<!DOCTYPE html>
<html>
<head>
<meta charset=utf-8 />
<title>JS Bin</title>
</head>
<body>
<div id="x1">One
<div id="x2">Two
<div id="x3">Three
</div>
</div>
</div>
<script>
function me() { alert(this.id); };
var divs = document.getElementsByTagName('div');
for (var i = 0; i < divs.length; i++) {
divs[i].addEventListener('click', me, false);
}
</script>
</body>
</html>
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