But since this forum is titled "Dave Friedman of Rack Systems Ltd." not "Friedman Amps Only", plus the fact his company does perform that mod, it seemed that this would be the right place to ask this question.
Well, as far as I know it's a Kill dry option.
That means the dry Signal is comepletely removed / killed. You will only her the wet fx signal.
Think for a delay: In normal operation you hear the direct guitar signal and the repeats.
With the kill dry option you will only hear the repeats. No kind of dry signal in any way.
With this option you can use the delay perfectly with parallel fx-loop.
A normal serial loop works like this:
Your signal passes the amps preamp and goes into the FX loop. Then your signal passes your fx unit and goes back to the return of the amplifier. To make things short: Your comeplet signal goes through the FX unit.
With killdry option you can use a parallel fx loop:
Here you always have a constantly direct dry Signal that will never leave your amplifier. Parallel to that signal line you have a wet only signal. With a mix knob on your amp you can blend the wet only signal to your dry only signal. Therefore you need an fx unit with no dry signal.
A lot of people say a parallel loop is the way to go cause it sounds more pure and organic than a series loop due to the fact that there is always a constant dry signal line with no sound degradation or sth like that.
Personally I'm using serial loop for years without problems.
My post was about amp loops. There are two different Kind of amp loops out there. Parallel and serial. For example looking at the rear panel of an old Diezel VH4. There you have bot loops. And a mix knob in front.
Now what you mean is the typical wet/dry/wet solution the most guitar pros use.
Basically your are doing the same as with a parallel loop but bigger
You have a basic dry half stack in the middle. This half stack is only for your pure in your face dry sound.
With an amps line out or a Splitter you can Route the Signatur to the wet cabinets. Therefore you need an Amplifier / power amp and effects with the kill dry option for example to hear only the effect but not the guitar signal.
So you have wet/dry/wet.
Research on Google will help. Steve lukather for example or Steve stevens, all good wet dry wet examples.