It means a capo on the 7th Fret of a guitar neck.
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A capo is a device which is clamped onto the fretboard and is used to hold all strings on a chosen fret, just as if you had your finger barred across on that fret. With that in mind, presumably "capo 2" would mean that you are being instructed to install the capo onto the 2nd fret. or in short....... you have to clip a capo on the second fret
Te capo does not change the location of the chords, it only places the open strings at where you place the capo, in your position, the open strings are at the 7th fret. The capo is only ever useful if you have difficulty playing full chords and you only need to change a few during a performance or if you require the open strings at a more convenient position for doing leads for songs played in a certain chord, where the open strings are used often.
Da Capo II happened in 2006.
Go back to the beginning and repeat. DC = Da Capo
A Capo. I use a shub or chub capo. Very nice.