A leased loop is any arrangement where a customer pays the telco for a dedicated loop for continuous use. A dry loop is a type of leased loop that isn't connected to any telco equipment, just spliced together to create a continuous circuit (a typical or 'wet' leased loop has at least battery and sometimes dial tone from the telephone switch). It's perfectly possible to get a leased line that spans telco offices, in which case your loop has to be spliced to an interoffice or toll lead (long distance line). In the days before heavy use of multiplexing, toll leads were scarce and so interoffice leased lines were extremely expensive.
Dry loops were often sold as burglar alarm circuits because one of the most common uses was for burglar alarm communicators that often operated on polarity reversal - meaning that they applied a potential to the pair and just swapped its polarity when an alarm condition occurred. Of course there were more sophisticated burglar alarm communicators at the time that used telegraphy techniques, but these usually ran on private networks since they could share a bus in a way that was not typical of telco infrastructure (most of these were basically Gamewell systems even if not made by Gamewell proper). In the early days of burglar alarm monitoring, if the monitoring service didn't have a private network (typical in urban areas) they usually installed their monitoring equipment or a multiplexing system at each telephone exchange in the covered area, allowing for more economical dry loops within a single office. Actually this pattern continued well into the '90s with some burglar alarm services using DSL-like high-frequency digital communicators that interacted with a monitoring system that had to be connected to the line card at the telephone exchange.