I think you're referring to a moisture or water separator, not a dryer. Dryers are usually an active refrigeration unit that removes water from the air as it passes through. A water separator is a passive unit, that causes the water vapor to condense and separate from the air stream. You'll normally only find dryers in paint shops and industrial settings.
Dry air is critical to paint quality and the lifespan of your air tools.
At the very least, you'll want a reasonable capacity vapor separator in between the compressor and your drops. Mount it as far from the compressor as practical, to allow the air to cool. Ideally, you'll also want an vapor/oil separator at each drop, but cost is often an issue.
Some good reading - keep in mind that it is geared towards industrial applications, but the basics are the same.
http://www.sharpe1.com/sharpe/sharpe.nsf/Page/Air+Piping+Layout
https://www.aircompressorsdirect.com/how-to-library.php