"Dire" is a very intense adjective. It is used to say that something must be addressed or attended to right away. "Dire" has a sense of urgency, alarm, and seriousness to it.
For example:
John is in the hospital. He had a heart attack and is near death. (John is in a dire state)
A boy is swimming in the ocean. There is a large, hungry shark swimming towards him. (This is a dire situation.)