bDoDepthOfField toggles depth of field, a kind of blurring to imitate the human eye's perception. This is most noticeable under water, reducing visibility to realistic levels (it looks clear otherwise). bDoDepthOfField is recommended to be enabled and is required for some ENB effects.
Default is 1.
This setting does not appear in game-generated INIs--only ones created by the Skyrim Launcher via the preset files, where Low and Medium is 0, High is 1, and Ultra is 2. It has been empirically verified that changing this setting in SkyrimPrefs.ini has no effect in game, but instead must be changed inside Skyrim.ini, otherwise the default value shall be used (which is 0). However, changing the setting in Skyrim.ini may induce CTD whenever radial blur is applied!