Unlike a wet sump system where oil is stored in the pan, a Dry Sump Oiling System stores oil in a separate tank - leaving the pan essentially "dry".
An externally mounted pump, generally with three or four stages, is used to "scavenge" or remove oil from the pan, deliver it to the storage tank, and send it back through the engine.
The primary advantage of a Dry Sump System is the ability to make more power. With very little oil in the pan, the rotating assembly is not burdened with the weight of excess oil (a phenomenon commonly referred to as "windage").