Do-follow is an search engine crawlers crawl the whole content on your webpage including images,links,keywords etc.Whenever they find a link,if the link is dofollow link then the crawlers follow the link and land on other webpage.
No-Follow links are ignored by search engine crawlers.Whenever you are linking to any website which is not of high value then use rel="nofollow" attribute in your html of the webpage. But it produces the traffic.