When writing dialogue, keep in mind the three-sentence rule: give no character more than three uninterrupted sentences at once. You really can trust your audience to read between the lines: in fact, part of the pleasure of reading a story is putting the pieces together. And most importantly, remember that your characters should not tell each other things they already know.
Sample Hemingway Dialogue
The classic example of this is Hemingway's story "Hills Like White Elephants." In the story, a man and a woman sitting in a train station bar talking. As the scene progresses, it becomes clear that she's pregnant and the man wants her to have an abortion:
"The beer's nice and cool," the man said.
"It's lovely," the girl said.
"It's really an awfully simple operation, Jig," the man said. "It's not really an operation at all."
The girl looked at the ground the table legs rested on.
"I know you wouldn't mind it, Jig. It's really not anything. It's just to let the air in."
The girl did not say anything.
"I'll go with you and I'll stay with you all the time. They just let the air in and then it's all perfectly natural."
"Then what will we do afterward?"
"We'll be fine afterward. Just like we were before."
"What makes you think so?"
"That's the only thing that bothers us. It's the only thing that's made us unhappy."
Note that the abortion, the procedure, is only alluded to. This helps illustrate their discomfort with the topic, but it's also realistic. Since it's the main thing on both of their minds, why would they spell it out? And while a less skillful writer might assume that the reader requires an explicit setup, Hemingway refrains from offering one. In addition to being more realistic, it's also more satisfying to the reader.
The Contrast of Denser Dialogue
Compare that to this break-up scene from a romance novel:
"Look, I know I should have invited you to my party!" he yelled. "But you hate my parties. You refused to move in with me. You never want to do anything fun anymore. Ever since you bought that old movie house, you are as outdated as the classic movies you show there. And when it comes to sex. . .let's not even go there. You never want to try anything new."
"Maybe because I'm tired after running the classic movie theater all day."
"Which you're always rubbing in my face. I have money, too. I bought this house. I run it. So what if I don't have a real job?"
Think back to your last break up. How much did you explain to each other why things were ending? Chances are, you didn't list every single problem, in a complete sentence, in that final argument. The dialogue here is more concerned with communicating certain facts to the reader, which is why it doesn't sound nearly as realistic as the Hemingway dialogue. (Though in the writer's defense, which of us does sound as good as Hemingway?)