Ac-apply is how protective a piece of equipment is, represented by how much in increases your armor class. Ac-apply is different from the similar item affect armor in that ac-apply receives an additional multiplier based on the wear location of the object. The bonus is as follows:
Equipment with the type armor and contructed of metal typically have higher ac-apply than normal. Also it is possible for some types of items to be enchanted for higher ac-apply using the warrior skill reinforce armor.