If you run your batch file with:
myfile.bat firstArg secondArg
%1
becomes “firstArg” and %2
becomes “secondArg”
The related shift
command shifts the position of arguments one to the left. Running shift
once in a batch file will make “%1” value to be the second argument, “%2” becomes the third, and so on. It’s useful for processing command line arguments in a loop in the batch file.
http://stackoverflow.com/questions/2309968/what-are-1-and-2-in-batch-files