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Open Source can mean many different things. To DotNetNuke Community Edition it means that you can download and utilize the platform without any licensing costs.
DotNetNuke is released under a BSD license, of the MIT variant.
In layman's terms (and this is just my take on it) the license for DNN allows you to download and freely use the platform in any manner you like, you just can't reuse the DotNetNuke name as that is trademarked.