Custom fields can be defined as alias column of the report since the operation is performed on report server rather than on database server. The custom field is very useful for the data manipulation like adding some fields whose value can be calculated based on expression, text e.g. instead of CName fetched from database, I want the dataset to display Customer Name etc.
We can add custom fields as right click on dataset, select add in Dataset window. The New field dialog box will open, we can add name of custom field and also mention whether it is database field or calculated one. If it is calculated, then we can mention the computation in this window.