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instead of one pump sucking from the pan, and feeding the engine, you get two pumps. One takes the oil out of the oil pan (sump), causing it to run dry (hence the name). It pumps it into a storage tank. The second pump, takes oil from the tank and pumps it into the engine.
In theory, the sump pump runs faster than the engine pump, so you never run the tank out of oil, and therefor never starve your engine of oil. Also, in a wet-sump system (normal C5/C6) the oil sloshes as you corner/brake, and if the oil is low enough, you could momentarily starve the oil pump and engine of oil. With a dry sump, the oil tank is design so that even as the oil sloshes, the output at the bottom of the tank always has oil readily available.
Also, if the reciprocating assembly (crankshaft/connecting rods) comes in contact with sloshing oil, it can place drag on the assembly, slowing it and using horsepower.
yes, and also the vacuum created by the sump pump can increase ring seal, but those are both secondary reasons. The primary reason is the increased oiling reliability.