Links that “point” to another site are called do follow links. These pass link juice to a page, help to increase its PageRank and raise its profile to the
search engines. The more natural do follow links a website/page has, the higher it is likely to rank online.

A no follow link is a link that doesn’t “point” to another site (no signposts). I think this is where people get confused, as people can still click onto a no follow link and get sent to another site, but in the eyes of the search engines they don’t “point” to anything.

Dofollow link will create link juice and Nofollow link wont create link juice.

Nofollow links wont pass link juice to your website..Where as Dofollow links will follow lnk juice to website for ranking

Specially for newbies who are new to SEO or people who are still not clear about Nofollow or dofollow, this post will be useful. Nofollow is an HTML attribute value used to instruct search engines bots that a hyperlink should not influence the link target's ranking in the search engine's index.

Nofollow link : It is a value that can be assigned to the real attribute of the HTML element to instruct some search engines that the hyperlink should not influence the ranking of the links target in the search engine's index
dofollow link : All links are the dofollow links unless they are modified with the rel=nofollow attribute