Dungeons are area in 3k which are created when a player enters specifically for that player (and their party). When you enter a dungeon, the level of all mobs in the area will be adjusted to your scaler level. Some dungeons only scale at a certain level.
Once you're saved to a dungeon, there is a length of time (shown with the "dungeons" command) before it will reset.
When in a party, the first person who enters a dungeon will establish its level. Anybody in the party with them can the enter at the original enterer's level.