Dry sleeves are pre-machined prior to being installed in the engine bloc; the outside surface does not come in direct contact with the cooling liquid.
Dry sleeves are split into two different families, for engine block in aluminium, with a threaded outside surface (to guarantee adhesion to the block) and for engine block in cast iron (very common in high-performance diesel engines).
Both types need to be machined with a smoothing operation after installation or casting of the engine block.