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Dotfuscator is a tool for obfuscating .NET assemblies.
.NET assemblies are relatively easy to decompile (i.e. change back into source code) compared to programs which are compiled directly to native code. There are many tools which can do this including Redgate Reflector.
This is bad news if you want to protect your intellectual property from others and obfuscators make the decompilation process much more difficult by using various devices.
However, it should be noted that obfuscators are unlikely to be able to protect your program from determined professional hackers - they will just make their job much more difficult - but they do protect from casual inspection.