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MIDI files - correctly referred to as Standard MIDI Files ("SMF" or *.mid files) are a popular source of music on the web, and for musicians performing in clubs who need a little extra accompaniment. The files contain all the MIDI instructions for notes, volumes, sounds, and even effects. The files are loaded into some form of 'player' (software or hardware), and the final sound is then produced by a sound-engine that is connected to or that forms part of the player.*
This video is a introductory demonstration of how to make MIDI files using free software called Anvil Studio.
* Source: MIDI.Org - About MIDI Files.