TFM stands for TeX Font Metrics; TFM files hold information about the sizes of the characters of the font in question, and about ligatures and kerns within that font. One TFM file is needed for each font used by TeX, that is for each design (point) size for each weight for each family; one TFM file serves for all magnifications, so that there are (typically) fewer TFM files than there are PK files. The important point is that TFM files are used by TeX (LaTeX, etc.), but are not, generally, needed by the printer driver.
This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=tfm