DLL stands for Dynamic Link Library, which in short means it’s a library of information, or functions, that can be linked to from different programs that make use of the information in the DLL. It is dynamic in the way that it is a repository with often several hundred functions, and the program linking to it can make use of any of them, or all, as required. The benefit is that programs do not have to include every single function in its own files, instead using the shared DLL, thereby reducing the program size.
A simplified example; ten different programs all need to show some form of button on your computer screen. Instead of each coming with its own button, they all call the same “showbutton.dll” that already exists on your computer. Since all ten programs use the same file, less space is used on your computer.