Well, Dust is a kind of invisible residue. That sounds gross, like germs or soap scum or something, but Dust is actually pretty magical and mysterious. It's an elementary particle, just like the electrons, protons, and neutrons you've probably heard about in science class.
In the world of The Golden Compass, Dust accumulates around people when their daemons stop changing – that is, when they go through puberty and grow up. As the radical theologian Rusakov discovers, it's the "physical proof" that something changes when innocence becomes experience (21.120). Dust also accumulates around the Aurora, and it's what makes the alethiometer work. We know that Dust is a big deal because all the scholars in Jordan College have a conniption fit when Lord Asriel shows them photograms of it.
But wait. We know where Dust clusters, but what does it symbolize? In The Golden Compass, Dust is Pullman's device to talk about the Christian concept of original sin.
DING, DING, DING! SHMOOP RELIGIOUS CONCEPT ALERT!
Sorry, we didn't mean to scream at you, but we needed to take a time out to talk more about this "original sin" business. Lord Asriel also explains it in detail in Chapter 21.
(Poke, poke. That's your hint to open up your book and re-read Chapter 21. It's really, really important.)
Lord Asriel reads us the key part of the Bible – the part of the Book of Genesis when Adam and Eve eat some fruit that God has forbidden, lose their innocence, and get booted out of the Garden of Eden – with the addition of daemons, of course. According to the Bible, Adam and Eve were the first humans, and therefore this was the first sin ever. Many Christians believe that humans would have been perfect and even lived forever if not for this "original" sin. But because Adam and Eve broke God's rule, they became sinful and handed their sinful nature down to their children, who passed it on to their children, and on and on. That would mean that all humans are born sinful. Got it now?
The Golden Compass adds a twist to the story of Adam and Eve. It says that when Adam and Eve ate the forbidden fruit, their demons stopped shape-shifting and settled into one form. This connects the Bible story to Pullman's world, hinting that there's a link between sinning and the time when children go through puberty and their daemons settle.
Asriel tells Lyra that though no one actually knows what Dust is, the Magisterium concluded that "Dust was the physical evidence for original sin" (21.98). Dust, then, is proof of humankind's inherent sinfulness. Lord Asriel wants to destroy Dust because he claims "sin and shame and death. It came the moment [Adam and Eve's] daemons became fixed" (21.117).
Sin, shame, death – that sure sounds bad, right? At the end of the novel, though, Lyra and Pan decide that maybe Dust isn't quite so bad after all:
"We've heard them all talk about Dust, and they're so afraid of it, and you know what? We believed them, even though we could see that what they were doing was wicked and evil and wrong... We thought Dust must be bad too, because they were grown up and they said so. But what if it isn't? What if it's-"
She said breathlessly, "Yeah! What if it's really good... " (23.100-101)
When Lyra and Pan question whether Dust is actually sinful or not, the book seems to want us to ask ourselves the same question. Perhaps gaining knowledge – and growing from innocence into experience – isn't such a bad thing after all.