Dropped 3rd Strike I stole this from wikipedia - it had the best description - better than I coulda!! An uncaught (or dropped) third strike occurs when the catcher fails to cleanly catch a pitch for the third strike. A pitch is considered uncaught if the ball touches the ground before being caught (a bouncing ball), or if the ball is dropped after being grasped (see also catch). Official MLB Baseball Rules 6.05 and 6.09 6.09(b): 6.09(b):.
On an uncaught third strike, with no runner on first base or with two outs, the batter immediately becomes a runner. The strike is called, but the umpire does not call the batter out. The umpire may also actively signal that there is "no catch" of the pitch. The batter may then attempt to reach first base and must be tagged or forced out. With two outs and the bases loaded, the catcher who fails to catch the third strike may, upon picking up the ball, step on home plate for a force-out or make a throw to any other fielder. Rule 6.09(b) Comment: A batter who does not realize his situation on a third strike not caught, and who is not in the process of running to first base, shall be declared out once he leaves the dirt circle surrounding home plate.
The purpose of the "no runner on first base or two outs" qualification is to prevent the catcher from deliberately dropping a third strike pitch and then initiating an unfair double or triple play with possible force plays at second base, third base, or home plate, in addition to putting the batter out at first base. The logic of the situation is similar to that which led to the infield fly rule.
Regardless of the outcome of an uncaught third strike, the pitcher is statistically credited with a strikeout. Because of the uncaught third strike rule, it is possible for a pitcher to register more than three strikeouts in an inning.
Following a controversial play involving this rule in the ninth inning of Game 2 of the 2005 American League Championship Series,  the application of the rule was changed when a comment was added in 2006 to Rule 6.09(b):
Rule 6.09(b) Comment: A batter who does not realize his situation on a third strike not caught, and who is not in the process of running to first base, shall be declared out once he leaves the dirt circle surrounding home plate.
This comment represents the official interpretation of the application of the rule. Prior to this rule change, a batter was able to try for first at any time before entering the dugout.