He is referencing PC based audio storage.
Lossless could refer to FLAC or AAIF formats.
NAS refers to network attached storage.
I have my whole collection of cd's ripped into FLAC on my PC, and serve it via ethernet cable to my Bolder modded SB3.
I have that data backed up locally, and offsite, AND still have the discs.
Lots of backup, in case any of the disc drives fail, or the house burns etc!