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It is a DSP filter. For PEQ, each filter cuts or boosts a range of frequencies and each filter has three controls. Frequency: the center of the frequency range to be cut or boosted, gain the amount of boost or cut and Q: the "sharpness" of the boost or cut, with higher Q meaning a narrower filter. Thus parametric EQ allows a single filter to be very narrow or quite wide.

An application note points out the difference between parametric EQ and graphic EQ.