A Self Reset is an operation that allows a user to set his own passwords to a desired new value, regardless of their current value. A user would generally want to do this in case he has forgotten his current password(s).
To allow a user to do this, a system must first use some other (i.e., not Password-based) method to authenticate him. This can be done by prompting the user for some obscure personal information, or by asking him to use a Smart Card.
This is a useful function in a Password Synchronization system: by changing multiple (or all) passwords for a user simultaneously, such software allows administrators to synchronize them.