An ASP.NET HTTP handler is the process (frequently referred 
to as the "endpoint") that runs in response to a request 
made to an ASP.NET Web application. The most common handler 
is an ASP.NET page handler that processes .aspx files. When 
users request an .aspx file, the request is processed by 
the page via the page handler.
To create a custom HTTP handler, you create a class that 
implements the IHttpHandler interface to create a 
synchronous handler or the IHttpAsyncHandler to create an 
asynchronous handler. Both handler interfaces require you 
to implement the IsReusable property and the ProcessRequest 
method. The IsReusable property specifies whether the 
IHttpHandlerFactory object (the object that actually calls 
the appropriate handler) can place your handlers in a pool 
and reuse them to increase performance, or whether it must 
create new instances every time the handler is needed. The 
ProcessRequest method is responsible for actually 
processing the individual HTTP requests.

Whenever we to work with user defined File Extensions we go 
for HTTP handlers.

HTTP handelers are process the requests at the endpoint in asp.net engine  and renders the request to the client.