"Reno" is a graphic account of a man's sexual encounter with a prostitute, told from the perspective of the man. The song is unusual for Springsteen because of its heavily sexual imagery and because it lacks any blue-collar sentimentality or poetic grace. After the two are done with their hookup, the woman toasts to the "best you ever had," and Springsteen lets us know, "It wasn't the best I ever had, not even close."
What seems like a crude tune has a lot more going on in the subtext. One line illuminates the underling emotions.
She had your ankles
So, the man's sad, empty encounter is his attempt to ease the pain from a lost love.
The choice to use the story's geographic location for the title seems weighted with meaning. Reno is sort of a little brother to Las Vegas, with both city's economies based around entertainment, gambling, and sin. They can be seen as morally hollow and existentially vapid places. Reno is a perfect setting for story about a guy who's down and out getting a hooker to ease his pain (and failing miserably), but it's also in itself a symbol of sorts.
This song was at the heart of a controversy with Starbucks. The coffee corporation wanted to sell Devils & Dust at their stores with the CD packaging customized with the Starbucks logo. Springsteen wasn't keen on the idea because it would go against his image as an anti-corporate, blue-collar rebel, but Starbucks also was turned off by the graphic lyrics to "Reno."
Playing a show in the Tower Theater in Philadelphia, Springsteen took a dig at Starbucks. Just before starting into "Reno," he proclaimed that the album would be sold in Dunkin' Donuts and Krispy Kreme, two of their biggest rivals. He was joking. They didn't actually sell them there. But the shot was clear.