Torque converter connects the engine to the transmission. It is a fluid coupling. The way it works is as follows: Imagine two fans one next to the other. If you turn the first fan on and have it blow right at the second fan, the second fan blade will start to rotate. This is exactly how the torque converter works, but instead of air, the torque converter fan blades are "blowing" hydraulic fluid (transmission fluid to be precise). The advantage of this setup is there is not a hard mechanical connection between the engine and tranny. This fluid coupling allows damping of shock loads preventing damage to the engine.