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In a criminal court, a judge can dismiss a case with prejudice, for example, when false accusations and lingering suspicions may do harm to the defendant's reputation or position in the community.
A case will be dismissed with prejudice if there is reason for the case not to be brought back to court; for example, if the judge deems the lawsuit frivolous or the the matter under consideration is resolved outside of court.
In the formal legal world, a court case that is dismissed with prejudice means that it is dismissed permanently. A case dismissed with prejudice is over and done with, once and for all, and can't be brought back to court. A case dismissed without prejudice means the opposite.
Dismissal with prejudice is a final judgment and the case becomes res judicata on the claims that were or could have been brought in it; dismissal without prejudice is not.