The MDL file formats are three model formats that are usually used in games that use a Quake-based engine. The Source SDK also uses the MDL extension, but it has a very different system so the models can not be used in the other engines. The main difference between MDL and most other formats is that the animations are not bone based, but instead are based on save keyframes for each and every vertex. Then, it is up to the engine to interpolate the vertices based on the keyframes smoothly. MDL models can end up to have a rather large file size because of this. I'm not sure exactly what MDL stands for, but I'm assuming it just is for "Model". There's actually a more updated version of the file system, called MD5, used mostly in the Q3 and IDtech engines.
[EDIT] I might have misread your post, if you already knew all that stuff and just were wondering what the extension stood for, I'm a fail. It just stands for "Model".