Let me start with the second question: What does it signify here?
The buff/cache entry from the free command shows you how much of your system memory (RAM) is being used for storing data in buffers and caches. The default unit is in KiB. If you use free -h, you'll see the value reflected in MiB. In this example, the machine is using 2596 KiB (about 2.5MiB) of system memory for storing buffers and caches.
Now to the other: What is the difference between buffer and cache?
Generically, a buffer is something used to collect fragmented or partial data until you have all the data you need. A great more tangible example of this is in video streaming. The video player will download data until it has enough of the video to start playing. If, for some reason, it is unable to continue to fill that buffer with video data, it will stop and many video players will have a spinning wheel or some other thing to tell you that it is 'buffering' meaning it's collecting more data so that the player can resume.
In Linux, buffers take the form of things like memory for network connections on the machine where we are collecting data from network interfaces and once the packets have been recieved, can pass that data to applications that service or use the data. It also allows for activities like if data packets are received out of order, they can be re-ordered, or if packets are missing, they can be requested for resend. So it's an area where we can store and organize data prior to passing it to some requesting application or user.
We also buffer things like disk I/O already engaged in the I/O subsystem through the assigned disk elevator (if applicable). Another example would be how sound is handled, being buffered, then sent to the sound card to ensure a consistent playing.
A cache is a collection of data we might find useful later, so we save it. There are lots of different caches which are reflected in the cache/buffers entry. swap cache - things we've sent to swap space, but don't need to expunge from memory yet, directory entry (dentry) cache - files and inode information from directories that have been recently accessed on the system, file cache - read file data or data intended to be written to disk which has not yet been sent to the disk I/O subsystem, page cache - things that have been deallocated or no longer needed by applications, but also who's memory has not been reused by the system or new applications/allocations.
Generally the buffers/cache space can be reclaimed by the kernel and re-used by applications naturally as free memory becomes more scarce. But there's also a kernel tunable under /proc, /proc/sys/vm/drop_caches where you can force the kernel to flush unused cache and buffer memory.
