What does DPS mean?

Yes it is an appropriate use of the term. It is more often used to refer specific damage output per second in the literal sense. But classes that are known for specifically dealing damage can be referred to as DPS. It can be used similarly to how a class would be known as a healer or tank class.

Most classes in most games deal damage and would have a DPS but as you used the term, most games have classes that are specifically used to deal significantly more damage than others. Those can be referred to as DPS classes in many circles.

DPS means, simply, Damage Per Second. It is a numerical value that represents the amount of damage one player can inflict onto another or the environment.

DPS is not dependent on class as much as it is loadout and abilities/skill - it can change drastically based on what weaponry you use.

It can be calculated by attacking a mob or similar non-stop for five seconds, and dividing the total HP lost by 5. Typically, the DPS stats you see in game are "optimal", meaning assuming you attack perfectly for one second.

Damage Per Second

Yes, you are using it correctly.

"Damage Per Second". DPS refers to heroes whose main purpose is dealing damage. This (generally) means offense characters. Alternatively, it is the ability to put a lot of damage on a single target, allowing for quick picks.

(Example) In Overwatch, a pharah can dish out insane DPS due to splash damage, no fall off on her rockets and her ability to focus on targets other team members can't. Meanwhile, a hero like Mei does significantly less DPS.

DPS as a person: A dedicated damage dealer class and specialization, such as an Arms Warrior or Shadow Priest.

DPS as a measurement: The amount of damage done every second over a period of time (5 seconds, 1 minute, an entire boss fight). Typically seen in damage meters like Details.

Examples of usage:

LF3DPS: Looking for 3 damage dealers/ Need 3 dedicated damage dealers.

Your DPS is low: The rate of damage you're outputting is low