http://en.wikipedia.org/wiki/Kde#History
The K was originally suggested to stand for “Kool”, but it was quickly decided that the K should stand for nothing in particular. Additionally, one of the tips in certain versions of KDE 3 [b]incorrectly[/b] states that the K currently is just meant to be the letter before L in the Latin alphabet, the first letter in the word Linux (which is where KDE is usually run).