V.F.D is the secret organization their parents were a part of. As later unearthed by Quigley Quagmire in the 10th book V.F.D stands for Volunteer Fire Department. Before the schisim you could tell volunteers by the tattoo on their ankle. The schisim took place before the Baudelaires were born when some volunteers fighting fire turned villainous and began lighting fires. V.F.D dug a series of tunnels from member's houses in event of a fire. Most of the Baudelaire's guardians after the death of their parents were member of V.F.D.