Melanocytes are the cells that produce the pigment melanin. These cells are derived from the embryonic nervous system.
Nevi or moles are benign tumors of melanocytes. They are common and usually appear before age 20.
Dysplastic nevi are atypical moles. They are usually larger than common moles. Many pictures of moles here.
All nevi are important because they must be distinguished from malignant melanoma.
Malignant melanoma is the most dangerous type of skin cancer. They most commonly occure on sun-exposed skin surfaces. Half of melanomas arise spontaneously and half arise from pre-existing moles.