
Coming from a source outside of the world of the movie’s action.
A line of dialogue in which an actor refers to his own (not his character’s) legal problems would be non-diegetic. So would a random insert shot of an elephant while a character describes his mother-in-law.
Often used in relation to sound. Examples of non-diegetic sound include suspenseful music and whooshing flashlight beams. Filmsound.org has a longer article about diegetic and non-diegetic sound.
From wikipedia:
According to Gerald Prince in A Dictionary of Narratology, diegesis is “(1) The (fictional) world in which the situations and events narrated occur; (2) Telling, recounting, as opposed to showing, enacting.” In diegesis the narrator tells the story.