In Datawarehouse the source data can be either DBMS tables or Flat files.
Now what is a Flat file??
Flat files are data stored in the form of columns and rows on our file system to emulate a DBMS table.The data in Flat files will be in ASCII format.
In the Datawarehousing projects where we use ETL tools like Informatica for extraction of source data we can use Flat files because using ETL tools we can easily manipulate the flat files into source data and it will be much more faster to handle flat files compared to DBMS tables .If we are using SQL scripts instead of ETL tool for extraction then its easy to go with DBMS tables.
Below image show the initial step in Informatica while importing a flat file.