    FILES=xx 

xx specifies the maximum number of files (from 1 to 99 (pre DOS 3.2) or
    255 (DOS 3.2 and later)) that the system can have open at any one time. 
    The default value is 8. If you specify a number below 5, DOS will 
    allow you to open 5 anyway. The most that any one program can have
    open on most versions of DOS is 20.

After a program opens a file, it can then access the contents of the file. 
If you allow too few files to be open, then the program must close one file 
to open another when it needs to access different files. Each open and close 
takes time, so it is quicker to open several files at once and leave them 
open. The default value of 8 is usually too low, a value of 20 or so works 
better. If FILES is set too low, sometimes redirection (<, >, and >>) will
not work properly.
