Hops - the main bittering ingredient in beer - are the perennial flowers of the Humulus lupulus plant. They are added during the 60-90 minute wort boil to balance out the sweetness of the malt. Without them, beer would be far too sweet, and wouldn't taste like beer.
There are many strains of hops that have been genetically modified to suit the preferences of the brewer. Some types are used primarily for bittering and some used to enhance aroma.
Dry hopping is all about enhancing aroma. The rule of thumb is: the later the hop addition, the greater the aroma you get from the hops. Some variants are used at the beginning of the wort boil primarily for bittering purposes while others are added in the last few minutes to enhance aroma (and have a much smaller impact on the bitterness). Can you guess when dry hopping occurs?
CORRECT GOOD FRIEND! After it's already fermented for a week! Dry hopping is all about aroma, and so the hops are added directly to the fermentation vessel (a pail, or glass carboy) after the yeast has fermented the sugars to alcohol.
I've been doing this with my most recent kegged beers and it enhances the taste and aroma substantially. Henceforth, nearly all of my beers are likely to be dry-hopped. You get an A+ for already knowing all this.