As your air compressors produces compressed air there is moisture, dirt and oil that is present in the air stream. Untreated compressed air is an unseen killer in all compressed air systems. Refrigerated air dryers use a refrigeration circuit with a heat exchanger to cool the compressed air. Condensation will drop out of the cooler air keeping that condensation out of your air stream.
Non-Cycling Refrigerated Air Dryers are the most common type of air dryer. The term "Non-Cycling" refers to the fact that the refrigeration compressor never shuts off. Once the dryer is on it is on. Generally, these dryers have a hot gas bypass to keep from freezing up. These dryers are best suited when a constant demand of air is being used in the process. If the air demand fluctuates up and down a Cycling Air Dryer is probably a better option. Be careful when using with smaller reciprocating and rotary screw compressors that the compressor has an aftercooler. The aftercooler lowers the air's approach temp to the dryer. If the approach temp is to high the Non-Cycling air dryer will not work as designed, a High Temperature Air Dryer is probably a better option.