Direct Mutual Funds allow investors to purchase mutual funds directly from the Asset Management Company (AMC), bypassing intermediaries like distributors. This direct approach reduces costs by eliminating commissions and fees. These funds are prefixed with 'direct,' indicating no involvement of third-party distributors. 

To explain further, imagine buying apples. Usually, you'd go to a supermarket, which acts as a middleman between you and the farmer. But buying apples directly from the farmer cuts out the middleman, saving you money on fees that would otherwise go to the supermarket.