Zotoaster,
Decals are 3d planes, which set on the surface of an object, as to look like it has changed the objects texture somewhat. Ever seen bulletholes created when shooting a gun at a wall in an FPS? Those bulletholes are each a small 3d plane, setting up next to the surface of the object.
Decallimit might define how many decals can show at one time. A decal is an object, and eventually, if the number of decals to be shown were limitless, they would eventually hit the system performace, due to so many calculations needing to be made. Therefore, decal planes are looped. That, once the last decal is made visible, then the decal system loops, and the first decal in the array is displayed where the next bullet is shot, and so on.

+NanoBrain+