A dialer is a computer program which is defined as malware; exploiting a dialup connection, a dialer will dial cost incurring telephone numbers. The telephone numbers that a dialer calls will provide revenue to the recipient of the phone call. Dialer's tend to take advantage of a dialup modem, and will hijack/replace the default connection to a dialup ISP (Internet Service Provider) and, instead, they will dial the premium rate telephone number.
For an unwittingly Internet user, they may not notice a dialer has been installed for quite some time - usually when their telephone bill arrives and they notice a considerable higher bill. A dialer may continue to guarantee a connection to the Internet, but will do so via a premium rate telephone number; the only difference the user will notice is the scale of the charge on their telephone bill. The problem that the user has, is that, a dialer is legal and it will appear to the telephone network that the user has, with intention, deliberately dialed the premium phone number.
While there are genuine dialers - which will clearly indicate to the user the cost involved in the service - the vast majority of dialers are malware, which install themselves with stealth and hijack the dialup connection of a computer. Malicious dialers install themselves in the same fashion that other malware does: by hiding themselves within legitimate software, or, being installed remotely when a computer system has been exploited by a trojan horse etc.
Dialers can be detected and removed by anti-virus and anti-malware software.