Virtual Dedicated Servers are kind of a hybrid between a Dedicated Server and a VPS and are referred to as a slice of a Dedicated Server.
A Virtual Dedicated Server works the same way as VPS, but each Virtual Dedicated Server has its own dedicated hardware resources and computing power in the form of CPU Cores and RAM available for you and for your own applications.
This makes a Virtual Dedicated Server much more powerful than a VPS but cheaper than a full dedicated server. A Virtual Dedicated Server also gives you more flexibility and more customizable hardware options than a normal VPS.