Googling brought up lots of sites with an explanation. From http://www.lachance.org/dit.html
'A "dit name" is an alias given to a family name. Compared to other alias or a.k.a. that are given to one specific person, the "dit" names will be given to many persons.
'One thing that can make it difficult to find your ancestor is that he or she may have been using a different surname from the one that you expect. You will need to make yourself aware of any "dit" names that might be associated with the surname you're tracing, and if you can't find someone under the name of his child, you may find him under the "dit" name. "Dit" in French means "say" and in this context, it means "called." In other words, a person might be Antoine Pépin dit Lachance, which means that he had an ancestor named Pépin, but he chooses to use the name Lachance instead. So he is Antoine Pépin called Lachance.
'Some surnames, such as Roy, have had several different "dit" names. You should be aware that usually a different "dit" name indicates a different family. For example, Siméon Roy dit Audy and Antoine Roy dit Desjardins were not related to each other. The same is true for Pépin dit Lachance and Caillot dit Lachance - they are not related families.'