Suppose you wanted a report that showed all employee names and their birth dates, but you wanted that report grouped by month. You would then have a list of those employees who have their birthdays in each month of the year. Or, you might need a report that shows all the orders placed, broken down by yearly quarters. You can group records by Date fields. When you apply grouping on a Date field, a second level of sorting options becomes available.
The first list gives you the option to select the field on which you want to base the groupings. You can pick the sort order in the second list. If you choose to base your groups on a date field, a third option will appear. In this third list, you can specify the frequency of the groups.