Despite his huge presence in pirate lore, such as in the term "Davy Jones's Locker"- or the bottom of the sea- the origins behind the character are not known. It is easily assumed that the character was a reference to the devil of the ocean.
In The Four Years Voyages of Capt. George Roberts which was written in 1726, the term 'Davy Jones Locker' is found. Later, in The Adventures of Peregrine Pickle by Tobias Smollett- whic was published in 1751- Davy Jones is brought up again. It says, "This same Davy Jones, according to sailors, is the fiend that presides over all the evil spirits of the deep, and is often seen in various shapes, perching among the rigging on the eve of hurricanes, ship-wrecks, and other disasters to which sea-faring life is exposed, warning the devoted wretch of death and woe" It later goes on to describe him as having saucer eyes and horns. Another reference from an 1824 book, Adventures of the Black Fisherman, say: "He came, said he, in a storm, and he went in a storm; he came in the night, and he went in the night; he came nobody knows whence, and he has gone nobody knows where. For aught I know he has gone to sea once more on his chest, and may land to bother some people on the other side of the world; though it is a thousand pities, added he, if he has gone to Davy Jones's locker."
Nobody knows who this Jones character was based off of. A pirate named David Jones sailed the Indian Ocean in the 1630's, but most would agree that he was never famous enough to have gained such a reputation. It could have also derived from Saint David, a patron saint of Wales. Or it could simply be name used by pirates to refer to The Devil.
Nobody really knows for sure. However, it is quite obvious that it has had a lasting effect on today's culture.