Yes, dry incubation is where you incubate without adding water until lockdown. It doesn't mean you have 0% humidity, it just means that the climate where you live is already humid enough that you already have ideal humidity due to the level of natural atmospheric humidity, and you don't need to add water to raise it even higher. 
Some people have to add tons of water to achieve their ideal humidity, and some people live in such humid climates that they will run an air conditioner in the room their bator is in to try and LOWER the humidity to an ideal level. Too little humidity throughout the incubation and your chicks will lose far too much moisture and could actually dry up and die before they even get to pip. I had this happen once and had a bator full of eggs with huge air cells and genuinely dried out dead chicks. It was horrible. Too much humidity and your chicks can die early, or drown in the excess fluid when they try to hatch. 
'Dry' hatches probably work best in places where the atmospheric humidity is somewhere around 30-35%, and your bator can be placed in a room without central heating or air conditioning. I imagine it wouldn't work too well in very dry or very humid places...