A decentralized exchange (DEX) is a service using smart contracts for executing crypto transactions. Unlike centralized exchanges (CEX), DEXs do not store customer cryptocurrency and do not perform customer verification (KYC procedure).
DEXs are useful for exchanging tokens, while most DEXs exchange tokens within the same network. Not so many DEXs provide exchanges between different networks. It is worth noticing that DEXs don't allow for exchanges between fiat and crypto. If you want to buy bitcoins for dollars, you would need a centralized exchange.
To put it simply: there are centralized (CEX) and decentralized (DEX) exchanges for exchange and other operations with crypto. To work with CEXs, you need to have a service custodial wallet and to pass identity verification. You don’t need all of this for DEXs, but DEXs do not exchange crypto for fiat.