The DAY function takes just one argument, the date from which you want to extract the day. In the example, the formula is:
B5 contains a date value for January 5, 2016. The DAY function returns the number 5 representing the day component of the date.
Note that you can use DAY to extract the day from a day entered as text:
But this can produce unpredictable results on computers using different regional date settings. In general it's better (and more flexible) to supply an address to a cell that already contains a valid date value as the argument for DAY.