This might be helpful to you:
How to remove ^M characters (they are end of line DOS's characters) from a file in vi:
where ^V is control-v and ^M is control-m.
:%s is the basic search and replace command in vi and the command you typed will look like this
:%s/^M//g. It will replace what is between the first and second / with what is between the 2nd and 3rd /. Between the first and second slash, we have ^M and between the second and third we have an empty string since we are replacing with an empty string.
g: means to replace all occurences.