Well think of it this way, all your .txt file is, is just a big fat string located somewhere in your Harddrive. What is a string? A string can be thought of as just a sequence of characters, and if you don't know what a character is then you've got some reading to do my friend.
Now to give you a leg in. You can't just reference a file through a memory address because memory addresses will almost always refer to an address within a program that has some allocated RAM(Random Access Memory). So what do you do? Well the it's the Operating systems job to help you with talking to your harddrive/ querying some data/ etc.
Since I see some one already posted a good resource I'd advise you to look at it.