The Cipher was a component of the rebuilt Intersect computer, stolen by Fulcrum sometime before the events of "Chuck vs. the First Date." It was retrieved by the team, stolen again by Fulcrum, then recovered again, and the device was installed in the new Intersect.
However, the device recovered by the team was a sabotage device/forgery and exploded, killing Director Graham and several CIA agents, and destroying the rebuilt Intersect. General Beckman described it as the "brain" of the Intersect in Chuck vs. the First Date. The real Cipher was subsequently recovered in "Chuck vs. the Seduction." Neither episode revealed the exact function of the Cipher in the Intersect.