A Fault Code Reader is a device that plugs into the car diagnostic socket and interrogates the system ECUs for any stored faults.
Some are cheap and cheerfull and only tell you the code number which you will have to look up in the Code Lists for what it means, then clear the faults in the memory.
Others in the mid price range (£200-£350 mark) will decypher the codes for you, beable to clear the faults in the memory and do minor setup tweaks.
The top of the range units will allow you full and complete access to all the systems, and allow you to override certain sensers to test if a component is actually working, calibrate sensers and read live data etc....but these are closer to the £600+ mark.
Look up details of the Bearmach Hawkeye, Blackbox Solutions Faultmate FCR and MVS systems, and of course the RSW Solutions offerings, although this one is limited on the P38 at the moment, but Stoney Wilson is working on it....(and the guy is a bloody genius if you ask me..!!)