Lactose is milk sugar--it's much less sweet than table sugar, and occurs naturally in milk and other dairy products. While you can certainly burn the chemical components of lactose for energy, it doesn't serve unique cellular functions--you can burn other carbohydrates instead with no ill effect whatsoever.
Lactose is a disaccharide, meaning it's made up of two smaller sugar units. The sugar units, called glucose and galactose, both serve as sources of energy for your cells. When you consume lactose, you break it into glucose and galactose using the enzyme lactase, explain Drs. Reginald Garrett and Charles Grisham in their book "Biochemistry." You then absorb these small sugars into your bloodstream, and from there, cells take them up for energy use.
The cells chemically "burn" glucose and galactose, which releases energy, in a process very similar to that through which you can burn wood in a fireplace to release energy. Using a variety of enzymes, which are chemicals that assist in cellular reactions, the cells break down glucose and galactose into carbon dioxide and water. This process generates a large quantity of ATP, which is a chemical energy molecule that the cells then use to fuel various processes, including movement.
You can obtain glucose from many sources; table sugar contains glucose, and starch is composed of nothing but long chains of glucose, explain Drs. Mary Campbell and Shawn Farrell in their book "Biochemistry." As such, you don't need the glucose from lactose to fill cellular energy needs. Further, your cells can convert galactose to glucose, which they do before burning it for energy. As such, you have no special need of the galactose in lactose. Lactose serves as a good source of energy, but isn't required to maintain health.
In addition to burning the components of lactose--glucose and galactose--for immediate energy, you can use them to make one of two energy-storage molecules. Your cells can make glycogen from both glucose and galactose, where glycogen is a form of carbohydrate storage used by the liver and muscles. This provides a supply of energy for periods of fasting. You can also convert both glucose and galactose into fat for energy storage purposes.