A conversation, an episode, or an event that happened before the beginning of a story is a flashback.  Often, a flashback appears in the middle of a story to gives information that helps in understanding a character's current situation.

Have you heard of the phrase "show me, don't tell me"?  Well, sometimes using past tense ends up "telling" a scene, but by using specific details in a flashback, you "show me" the scene.  A true flashback sounds like someone is reliving the scene.  For example:

FLASHBACK:  As children played around him, the quiet smile on grandpa's lips told us he was lost in thought, recalling the summer times of his youth.  He would awaken at the first sign of light, get dressed and creep outside quietly.  It may have been summer, but he still had chores on the farm: feeding the chickens, sweeping the coup, and picking the ripe berries to serve with breakfast.  If he finished everything quickly, that meant he would be allowed to run to his friends' houses to play stickball and search for tadpoles in the creek.

NOT Flashback: One time, grandpa told us about how he lived on a farm when he was little.  He had some chores, but when he finished, he got to play.  His favorite games were stickball and catching tadpoles in the creek.  It was special when my grandpa told me about his childhood.