Both 'das' and 'dass' mean 'that' in German, though both have different grammatical functions. 'Das' (which also functions as the definite article of neuter nouns in the nominative and accusative grammatical cases), when used to mean 'that', functions either as a relative pronoun or a demonstrative pronoun. 'Dass', on the other hand, functions as a conjunction. Thus, clareydairy's use of 'dass' is incorrect, as it is functioning as a relative pronoun. In this instance, 'dass' should be 'das', i.e.:
'Ich lese dieses Buch, das ich gestern gekauft habe'.
Incidentally, use of either 'das' as a relative pronoun or 'dass' always sends the first verb, auxiliary or otherwise, to the end of the clause (not necessarily, however, the sentence).
The following are examples of all three grammatical functions of 'das' and 'dass' that I have mentioned:
*'das' as a demonstrative pronoun
'Das ist mein Auto' ('That is my car')
*'das' as a relative pronoun
'Frankreich ist ein Land, das ich liebe' ('France is a country that I love')
*'dass' as a conjunction
'Sie sagte, dass sie mich liebe' ('She said that she loves me')
In the following sentence I have used the word 'das' thrice; once as a demonstrative pronoun, once as a definite article (English: the), and once as a relative pronoun:
'Das ist das Kind, das die Bonbons genommen hat'. ('That is the child that took the sweets')