Just as sendmail can transport a mail message over a TCP/IP-based network, it can also receive mail that is sent to it over the network. To do this, it must be run in daemon mode. A daemon is a program that runs in the background independent of terminal control.
As a daemon, sendmail is run once, usually when your machine is booted. Whenever an email message is sent to your machine, the sending machine talks to the sendmail daemon that is listening on your machine.
The -bd command-line switch tells sendmail to run in daemon mode. The -q1h command-line switch tells sendmail to wake up once per hour and process the queue. Command-line switches are described in z/OS Communications Server: IP User's Guide and Commands.