What does the "Sound Enhancer" really do???

I've been fiddling around with I new higher end audio system through which I play my lossless audio files as streamed from my iMac and iTunes. I found that a number of CD's I have just sounded awful, very distorted and made the speakers sound 'blown'. I chocked it up to a bad recording, but then found that I had my "Sound Enhancer" fully up. When I backed it off, and then turned it off. The 'blown' sound went away, and the speakers sound great now.

What really is the function of the "Sound Enhancer"? Is it basically a gain switch? An additional equalizer? What?