Armor Class
Term
Your Armor Class (AC) is: 10 + Body + Equipped Armor + Active Magical AC + Equipped Shield.
Any Attack Roll result rolled between your EC and AC still hits (allowing for more damage or chip damage). The damage is rolled and a Damage Reduction is applied to the damage Roll Result.
The DR is: AC - 10. This represents how much damage is absorbed by your armor (which could be from physical iron armor, natural armor, or a magical shield).