Barbarians and Monks have an innate 30% passive damage reduction versus all sources. This damage reduction is applied at the same time as all other damage reducing effects (such as Armor), but prior to shield block.
Damage Reduction from Armor = Armor / (Armor + (50 * mLvl)) 
Damage Reduction from Resistances = Resistance / (Resistance + (5 * mLvl))
Absorb is simply a limited amount of damage that can be prevented, usually invoked by skills such as Mantra of Healing.