X711, I hate to disagree but you are wrong about almost everything except the compressor generating heat. "this heat will condense the AIR
? and the end result is water"? I would suggest you refresh your self on physical science , Where do you think this water comes from? Anyway what really happens is that the hotter the air the more water it will hold in VAPOR form and until this air is cooled to allow the WATER VAPOR to condense(this is the dew point principle) into a mist in the air and droplets on the tank and pipe walls then the dryer(actually a water separator) cannot do much to remove it. A water separator works by spinning the air as it passes through thus using centrifugal force to sling the heavier condensed water out of the air allowing it to be collected in the housing of the unit. Water vapor, however, is for all practical purposes unaffected by centrifugal force and passes through into the air line where it cools and condenses into liquid water on the hose walls allowing it to exit into your tools,paint or whatever. The air coming directly from the tank is still hot unless the compressor has been sitting idle so most of the water contained is still in vapor form due to the higher temperature and thus will be unaffected by the centrifugal force of the spinning air in the separator that is why the air must be cooled by some method before the water can be removed. This is most commonly done by using a length of METAL pipe between the tank and the separator but sometimes a cooler is used. This is common industry practice and just plain common knowledge and if you take the time to research air plumbing systems you will find that these principles are incorporated into almost every design except for the systems that use a refrigerated dryer to cool the air before water removal.