Hi Alisha,
Disney Dining Plans are options available exclusively to Guests of select Walt Disney World Resort hotels with
Magic Your Way Vacation Packages.
In a nutshell, by adding a Dining Plan to your vacation package, you are in effect pre-paying for the meals that you will have during your trip.
There are over 100 restaurants which participate in Disney's Dining Plans and they are very straightforward and easy to use.
There are 5 different Disney Dining Plans available:-
Quick-Service Dining Plan
Disney Dining Plan
Deluxe Dining Plan
Premier Dining Plan
Platinum Dining Plan
You can find more information about all of the different types of Disney Dining Plans as well as how they work on the Walt Disney World website
HERE.
I'm not sure what you have read about people using points to purchase the Dining Plan. Perhaps you have read something about Disney Vacation Club owners using points for a trip to Walt Disney World?
I hope that this information has been of help and wish you a magical trip!