What is dialogue?
It is "the essence of real life speech." Sounds real, and feels real without the useless filler that all of us use in everyday conversation.
What is dialogue's purpose? Threefold:
1. Advance the plot
2. Reveal character
3. Show/develop relationships
Every character has a distinct voice, and in a really good screenplay, you could just read the dialogue and instantly know who is saying what without seeing the characters' names.
And finally, dialogue is conflict- a negotiation between characters. And really great dialogue has subtext - they are arguing about a dog, but in reality, they are arguing about the affair that occurred 5 years ago.