Armor Class

Armor Class, abbreviated to AC, is a derived statistic in Fallout, Fallout 2, and Fallout Tactics.

Gameplay
AC is one of three stats by which a character can reduce or avoid damage. The other stats are DT (Damage Threshold) and DR (Damage Resistance). AC occupies the "first step" for combat and simulates the difficulty of landing a telling blow on targets that are evasive or otherwise highly mobile or wear armor that may completely deflect glancing hits without even needing to absorb the damage.

More specifically, before damage is even checked, the game generates a random number from 1 to 100 and checks it against a target number:
 * $$Required = Adjusted\ to\ hit\% - AC$$

If the random number is less than or equal to the required number, then the attack is declared to be a hit and DT/DR are then checked.

"Adjusted to hit%" means the character's base skill level modified by distance, weapon, aimed body part (if applicable), cover, etc. The required number can never be more than 95; as a legacy of tabletop role-playing games, there is always a chance (one in twenty) to miss. Outside of an Aimed Shot there is a minimum 5% chance to hit, but inside an aimed shot, individual body parts can have a 0% chance to hit, indicated by dashes instead of a proper number ("--").

Initial level: Starting armor class is equal to your Agility. Average characters will have an armor class of 5. This statistic can be further modified by armor and perks. In addition, at the end of each combat round, your AC increases by each unused Action Points.

Modifier
Armor Class Modifier on ammunition in Fallout and Fallout 2 indicates how much to change the target's Armor Class. A lower amount yields a higher chance to hit. It does not work in Fallout due to an engine bug.

Related perks

 * The Kamikaze trait sets the initial level to 0, instead of your agility.
 * The Dodger perk increases AC by 5.
 * The HtH Evade perk significantly increases the AC bonus at the end of each combat round, provided you are currently unarmed.