The dominant chord (or the chord built on the 5th degree of a scale) is a fairly important chord on the guitar because its structure and tendency toward the tonic chord really help define the tonal center of a progression. The word dominant refers to two things in music theory:
The first is the 5th degree of the major scale, named the dominant.
The second is a major triad with a minor 7th, called the dominant 7th chord, which naturally occurs on the 5th scale degree.
The chord function on V is the most important example of this. Because it’s built on the 5th scale degree, or the dominant note, the V chord has what’s sometimes called a dominant function. In a chord progression like I-V, the dominant chord has a sense of movement, or instability, that makes the progression want to continue leading back to the tonic, chord I.
You can intensify this leading quality of V by adding a 7th to the chord, making V7, or a dominant 7th chord. Every major scale has a naturally occurring V7 chord: G7 in C major, D7 in G major, A7 in D major, and so on. Here is a sample I-V7 chord progression in C.
Musicians also use the dominant 7th chord for its sound quality, or color. You hear this use in blues-based music, where the dominant 7th sound is a huge part of its style. These static dominant 7th chords, as they’re called, don’t necessarily need to resolve to a tonic chord.