Throw your laundry into the dryer without a dryer sheet, and it comes out a rumpled, static-y mess. Toss one in and the results are much better. How can adding this flimsy sheet change the way all your clothes come out of the dryer?
When you first add a dryer sheet to your wet laundry, it does nothing at all. It only starts working when the dryer is on. The warm air that circulates through the damp clothing releases chemicals from the dryer sheet, and these chemicals permeate all the clothing, even clothing the dryer sheet never directly touches.
The chemical that a dryer sheet releases is known as a surfactant. Most surfactant molecules have two sides, one that holds onto water, and one that holds onto fats and oils.
The molecules of surfactant used in dryer sheets have unusually large fatty sides, and their water side is good at grabbing onto fabrics. Mix it with your clothes, and the water side locks the molecule in place while the oily side points outward, coating the surface of every piece of clothing with an extremely thin layer of oil. You can feel this oil yourself by rubbing one of the sheets between your fingers. This oil allows your laundry to tumble around without the static buildup that ordinarily occurs when your clothes rub together. Your laundry comes out softer too, because it's just that little bit greasy!