Windows Server 2008 Windows Security - Security Identifiers

Security principal is an entity that can have a security identifier (SID), SID is a (mostly) numeric representation of a security principal. The SID is actually what is used internally by the operating system. When you grant a user, a group, a service, or some other security principal permissions to an object, the operating system writes the SID and the permissions to the object’s Access Control List (ACL).