When a Dungeon Key drops in the game world, it drops for specific dungeon.
Using the key will upgrade the dungeon to an end-game dungeon.
Each key has a specific difficulty rank. The higher the quality, the higher the quality of drops within that dungeon.
Keys roll specific affixes which are applied to either players, enemies, the environment or any or all three.
Blizzard has given an example such as, “all enemies are invisible unless they are in combat” or another example such as "there are double bosses in this dungeon”. Having both these affixes applied on a key will give a very different dungeon experience.
Salvaging for Crafting
Dungeon keys can be salvaged for crafting.