It's derived from a calculation using the trap speed & race weight of the car. I've heard varying opinions on what the final number actually is (peak fwhp, average fwhp, net hp, rear wheel hp, etc.), but here is the formula used:
You can see where you car measures up using the above formula, or just plug your numbers into the calculator on this page (use Patrick Hale's calculator):
http://www.stealth316.com/2-calc-hp-et-mph.htm