Decision Tree is a kind of algorithm which is built by starting with initial decision and moving along with choices ahead to find the exact answer to how a data depends on other variable.
It helps you to find out the best fit outcome based on different conditions.
I can try to explain this to you with an example of demographics data and kind of program watched by person on Netflix.
I am taking a small example here, although real life extraction of decision data will be more complex than this.
Now in the data above lets target 'age' first, and we will observe that all people below or equal to 20 years like to see "Breaking Bad".
In rest of the data if we target 'gender' as independent variable we can clearly see that men in age group above 20 years of age like to see 'Prison Break', while women would like to see 'Mad Men'.
This whole data can be presented in the form of decision tree very simply as below:
Hope, the application of decision tree is clear from the above example.
Thanks for reading!