Any application that uses a database must establish a connection to that database before any transactions can occur. An application can be an UltraLite command line utility, a connection dialog from either Sybase Central tool or Interactive SQL, or your own custom application.
By connecting to an UltraLite database, you form a channel through which all activity from the application takes place. Each connection attempt creates a database specific SQL transaction.
List of UltraLite database connection parameters
The role of user authentication