The "Discard" link appears when you are editing a document. You only see it after you have made changes to your document. If you did not make any changes it will say "Cancel".
Clicking the "Discard" link will close the edit bar and discard any changes you made since your last save. If you discarded by accident, you can undo the discard.
After discarding you see the document just like any visitor of your Silk site would see it.