It's a common and polite way to respond when someone thanks you for something.
Here's a breakdown of the phrase:
* Y: And
* de: of
* nada: nothing
The phrase literally translates to "And of nothing," which is a bit odd in English. But it's a common and idiomatic way to express gratitude in Spanish.
Here are some other ways to say "You're welcome" in Spanish:
* De nada: (Literally "Of nothing")
* No hay problema: (No problem)
* Con mucho gusto: (With pleasure)
* Por favor: (Please - used as a polite response)
* No te preocupes: (Don't worry)