The dwell time is the duration in which each m/z ion signal is collected. For example, if you are monitoring one transition in an MRM experiment and have a chromatographic peak that elutes in 10 seconds, in order to collect 10 points across the peak you would set a dwell time of 1 sec.
Increasing the dwell time improves detector ion counting, i.e. sensitivity, by averaging the signal for a longer period of time. However, this will result in fewer points across the peak. For precise quantitation we recommend you adjust the dwell time to obtain at least 10-12 data points across the peak. Also note that higher flows produce sharper peaks, typically making shorter dwell times necessary for sufficient sampling. Furthermore, it is possible to over-sample a peak which can give the chromatographic peak a choppy appearance.