If A Criminal Case Is Dismissed What Does That Exactly Mean?

If a case is dismissed it means that you were not convicted of the crime.  With that said you still have a record and it still can hurt you with jobs or government background checks.  You should tried to get it expunged that way no body will be able to see it. Believe me these days innocent to proven guilty is bullshit, people still judge and decide on the charges they view guilty or not guilty.

it's dismissed but he or she still has a record on file .

Yes, to be convicted you either had to plead "Guilty" or be sentenced under a "No Contest" plea, or the case had to be prosecuted with a "guilty" outcome.