Air handlers are electric furnaces with integrated cooling/heating coils that are normally installed in conjunction with a heat pump. An air handlers job is to distribute air throughout your home, heat your home in the winter, and dehumidify and cool your home in the summer. They are quite often installed in homes with no natural gas or as auxillary systems in a basement or room addition.
Just like there are different types of gas furnaces, there are different types of air handlers. A single speed air handler runs at the same fan speed all the time, and then there are variable speed air handlers that vary their output by demand. A variable speed air handler runs off D/C (direct current) while a single stage air handler is powered by A/C (alternating current). The D/C driven variable speed air handler can be coupled with a humidity-sensing thermostat that allows enhanced dehumidification in the summer. This system can remove 15-20% more moisture from your home than a standard single speed air handler.
Air handlers typically have auxillary heating elements which are installed by your contractor. These heating elements are available in different amounts of heat output. The heating elements provide heat on cold days to supplement the output of the heat pumps.