Its a scientific term. It keep it simple:
If you have wild unrelated parents. The parents are F0, the offspring are F1's.
If you keep a group of the F1's and they pair up and reproduce their offspring are F2's and it just keeps adding up from there, i.e. next generation F3, next F4. This continues until some new unrelated blood is added to the mix.
So if you had a female that was an F4 and you crossed to a unrelated male that was a F2. Since they were unrelated the offspring would now be an F1 (first generation)
This is not 100% scientifically correct but it works in this case.
-john