Extension is the specific number within a company or organization. So typically, you would call 555-0904. The company switchboard would answer, and ask you to dial the extension of the person you want to speak with. You would then dial 654, and the company switchboard would ring that person's phone. It's a way for a company to have one public phone number (555-0904) but allow many people internally to use it, because they each have their own extension. (Hopefully, I don't sound like I'm talking down to you. This is harder to explain than I thought :) )