Dry rot is the common name given to the wood-rotting fungus, serpula lacrymans. Despite its common name, dry rot will generally attack timber that has been subject to a form of moisture.
Fungal decay in timber is always related to high moisture content. Providing that timber is kept dry, it will not decay due to fungal attack. When untreated timber becomes damp and if allowed to remain in that condition it will almost certainly be attacked by one or more of the many wood-rotting fungi.
Once initiated, the hyphae and mycelium growth of the fungus has the ability to grow through and over damp masonry etc., in search of further cellulosic based material to attack. Timbers which are in direct contact with or within adjacent areas of damp masonry will be at great risk from an attack, for example, joist ends, lintels, panelling, fixing grounds, skirtings, etc. and any other timber which can become and remain damp.
The first evidence of a presence of dry rot is often the appearance of a fruiting body (sporophore) or the shrinking/distortion (cuboidal cracking) of timbers. This effect can often be sudden and quite dramatic, leaving timber weakened and unstable.
There are many fungal species causing wet rot eg brown rot, white rot, soft rot to mention a few. Some of the wet rot species can easily be confused with dry rot. However, treatments with regards to wet rot decay are quite often less invasive than that of dry rot and may only require the removal of the source of moisture.