"It's a device, Morty, that when you put it in your ear, you can enter people's dreams." This drives the plot of Lawnmower Dog.
Rick states that if you die in someone's dream while using the device, you die in real life.
Rick explains that you place it into someones ear while they are asleep, and then you can enter their dreams. In order to return from the dream, the dreamer must be woken up, typically by dream death, which seemingly does not affect them in the real world. It is assumed that the death in dream resulting in death in real life only occurs if you are not the dreamer, but are merely incepting inside of someone else's.
The dream inceptor produces a high pitched whine when activated, similar to the sound an older camera flash would make as it charged. If it is used inside a dream, the effects of time will become 100 times slower in the next dream, although it is unclear whether each subsequent dream will be a power of ten time decrease, or a fixed 100x multiplier.