Let our minds wander to where we are sitting on the back deck, and the hot summer sun is beaming down. A bead of sweat trickles down our chest, and we are thirsty! We reach into the cooler for another frosty bottle of our favourite malted beverage.
Let us also imagine that we put this ice-cold mug of suds on the railing of the deck right beside us. Very quickly we'll see beads of water forming on the outside of the cold glass.
The film of air around the mug in the picture cools rapidly due to the cold temperature of the surface of the glass. The air that is actually touching the glass quickly gives up the moisture it is carrying.
The temperature of the air that is touching the glass quickly falls below its dew point, and water condenses out of that air.
That water then trickles down your mug and onto the front of your chest as you swallow the frosty beverage. Mmmm, delicious! The beer of course, not the air dew point.
In order for the water in the air to remain in a vapor form, whether it is the air on your back deck or the compressed air in your plant lines, the air must be warmer than the surface it is touching.
As air cools, it can hold less water vapor.
However, if the air entering your plant from your compressor had a dew-point that was below the temperature existing throughout your plant, then no water vapor should condense from the compressed air into free water in your air lines.
Air dryers help to take water and water vapor out of the compressed air stream. They lower the dew point of the compressed air stream to try and make sure that water won't condense from your compressed air as it traverses your air mains.
Cooling the air helps. Drying it helps. More on the cooling and drying of compressed air here.