What's the difference between dot sourcing and non-dot sourcing?

My teacher is incompetent in this matter.
I've been struggling to make logic out of the use of dot-sourcing and non dot sourcing. 
What is the difference? I've been bashing my head against the wall for the past hour.

Hi Loginux,
"simply" put, non-dotsourcing scripts / functions will run them in their own small box ("Scope"), which is discarded when the execution finishes. Dotsourcing will run it in the current environment. Example:
script.ps1:
$Hello = "Hello World"
non-dotsourced:
$Hello = "Hi Mark"
& .\script.ps1
Write-Host $Hello
dotsourced:
$Hello = "Hi Fred"
. .\script.ps1
Write-Host $Hello
Cheers,
Fred
There's no place like 127.0.0.1

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