The moisture contained in outside air is compressed with the air in the compressor. As the air is compressed the temperature will rise, increasing the moisture carrying content despite the smaller volume.As the air cools after compression, moisture will separate (condense) from the air as it goes through the compressor after-cooler, where it drains (usually from a skid mounted post compressor filter – shown as a pre-filter/cyclonic separator in the schematic). The air will then go through the intermediate filters (filter A and B) into the dryer.