The Dock is the place on the OS X desktop where you can store application icons, folders, or documents that can be opened with a single click. In the picture below, the Dock is positioned at the right hand edge of the screen. Nomally, its default position is at the bottom of the screen.
The Dock not only acts as a storage "dock" for icons for applications you frequently use but also shows you icons for any running application. In the picture above, the running applications are the Finder and Grab. Finder is the operating system's disk and file manager and always runs anytime you boot into OS X, and Grab is an application in your Utilities folder that grabs screen shots.. You can tell which applications are running by looking for a black triangle(s) either to the side or below the application icons, depending on whether the Dock is on a side or at the bottom of the screen. Notice the small line just below Grab. That divides the Dock into sections. Programs are above the line. Documents, folders, or URL's go below the line. To add any program (or folder, etc.) icon to the Dock, simply click on the program's (folder's) icon and drag it to the Dock. To remove any icon, click on it and drag it off the Dock to and let go of the mouse button. The icon will disappear in a puff of smoke.
You can open a file within a program on the Dock by clicking on the file, dragging it to the program's icon, and letting it go. The program will launch and open the file just like you had opened the file and used its File/Open commands to fetch it.
The Dock's position is controlled from System Preferences which you can select by clicking on the white block with an Apple on it (just above Grab). When you do, you'll see what's depicted below:
Click on the "Dock" icon and you'll see how you can customize the Dock using System Preference settings.
Dock Size: As you can see, you can make the Dock bigger or smaller by clicking on the slider and pushing it left or right. I adjust the Dock's size not only to hold all my often used icons but to work in conjunction with the Magnification setting discussed next.