Davlos III was the inhabited third planet in its star system. This planet was located on the Klingon border. Ninety percent of its trade was with the Klingon Empire.
When Klingon Intelligence sent a covert strike force to Deep Space 9 to conduct surveillance operations on a group of Romulans visiting the station, they used a device manufactured on this planet to turn a replicator into a transporter for beaming surveillance equipment in the Romulan quarters. (DS9: "Visionary")
"DAV-los" was the pronunciation for this planet's name from the script pronunciation guide. 
According to StarTrek.com
, Davlos III was an independent planet.