A dry fly is basically any fly that is fished solely on the surface of the water, thus staying "dry". With that said, you'll most commonly hear the term dry fly amongst anglers that fly fish for trout. These small surface flies can imitate a wide variety of insects such as caddis, mayflies, or stoneflies. Dry flies can work at many times, but the best time is usually during an insect hatch when a large number of bugs are actively flying and landing on the surface of the water. Fish will key in on this activity and feed heavily right on the surface, often ignoring other food sources until the hatch is over.
Side note: Even though other surface flies like poppers and bass bugs technically are dry flies, they are seldom referred to as such.
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