Hi,
DNS relay is where a device, usually an Internet gateway accepts "Domain Name Service" requests from clients and forwards them to a name server on the Internet.
In a typical xDSL service your router will supply IP addresses and DNS information to clients. Your router will get it's Internet IP adddress form your service provider and the service provider will also give your router a DNS server address.
If you disable DNS relay, it is likely that your router will stop forwarding DNS requests from your clients and unless you manually define DNS servers on your clients they will not be able to access services on the Internet.
It should not affect any incoming connections from the Internet but it would affect outgoing. However without more detailed information about what product you are referring to or your network setup it is difficult to be sure.
Please be aware this forum is for Huawei "Enterprise" products, if your quesry is regarding a consumer product you should check out the "Consumer" area of our web site.