Wikipedia
devpts is a virtual files system available in the Linux kernel since version 2.1.93 (April 1998). It is normally mounted at /dev/pts and contains solely device files which represent slaves to the multiplexing master located at /dev/ptmx.
The creation of devpts resulted from the wish to abandon the need for a setuid helper program, e.g. /usr/libexec/pt_chown. It is a distinct implementation of the pseudoterminal idea; the previous implementation provided a fixed number of master/slave pairs which had permanent device nodes, for example the master-slave pair /dev/ptyp63 and /dev/ttyp63, cf. The Linux Programming Interface chapter 62 "Terminals" and chapter 64 "Pseudoterminals".
A pseudoterminal ("pseudo TTY" or "PTY") is a pair of pseudo-devices – a slave and a master – that provide a special sort of communication channel. The slave pseudo-device emulates a physical computer text terminal, like e.g. the DEC VT100, it can read and write text as though it was such a physical terminal. The master pseudo-device provides the means by which a program providing a text-based user interface acts with and controls its slave. Widely spread programs with a text-based user interface are terminal emulators, e.g. xterm, gnome-terminal or Konsole, or programs using SSH or telnet. Writing to the master is exactly like typing on a terminal, thus the master pseudo-device acts kind of like the person sitting in front of the physical computer text terminal.
A pseudoterminal pair is similar to a bidirectional pipe. Anything that is written on the master appears as input on the slave, and anything that is written on the slave appears as input on the master. Like pipes, pseudoterminals have a limited capacity. On Linux, the pseudoterminal capacity is about 4 KiB in each direction.
A typical Linux kernel-based operating system provides lots of PTYs to support text-based interfaces as provided by terminal emulators (such as xterm or gnome-terminal) and remote access interfaces like SSH.