self refers to the object that is currently in context.
In your example, self is the class itself and def self.method is defining a class method. For example:
class MyClass
def self.method
puts "Hello!"
end
end
> MyClass.method
#=> "Hello"
You can also use self on instances of a class.
class MyClass
def method_a
puts "Hello!"
end
def method_b
self.method_a
end
end
> m = MyClass.new
> m.method_b
#=> "Hello!"
In this case, self refers to the instance of MyClass.
There is a good blog post on self in Ruby here, or, as it was pointed out in the comments, there is some more on this in the Ruby documentation.