DAX, or Data Analysis Expressions, is a formula language used in Power BI development for creating custom calculations, measures, and calculated columns. DAX is important because it allows developers to build advanced analytics within reports, such as aggregations, time intelligence functions, and conditional calculations. It enhances the capabilities of Power BI development by enabling more detailed and complex data analysis. With DAX, users can go beyond basic reporting and perform in-depth calculations, such as year-over-year growth or rolling averages, which help businesses gain deeper insights from their data.