The DIY Mod (aka a capacitor mod) involves bypassing the iPod's onboard capacitors to use higher quality ones. This is done by people looking to achieve greater sound quality from their iPod.
(more in-depth information is required)
One popular choice for pre-DIY modded iPods used to be Red Wine Audio. They greatly popularized the mod (they referred to it as the "iMod").
Resources
Extensive guide covering many iPods (and even a 1G Zune and an iRiver): https://www.instructables.com/DiyMod/
iFlash Guide covering the DIY Mod (on an iPod Video 5/5.5): https://www.iflash.xyz/modding-audiophile-meets-ipod-diymod/
Archived Red Wine Audio webpage on their "iMod": https://web.archive.org/web/20080831101952/http://www.redwineaudio.com/iMod.html
Archived Red Wine Audio webpage on their "iMod" but more updated: https://web.archive.org/web/20121007101506/http://redwineaudio.com/imod
Short Hackaday page on the "iMod": https://hackaday.com/2007/12/24/diy-ipod-dac-modding/