You can think of memory as being organized a little like your office. Small amounts of frequently used information, such as the departmental phone list, are put on the bulletin board above your desk. Similarly, you keep information on your current projects close at hand. Less frequently used information, say the city phone directory, sits on the bookshelf next to your desk. Rarely used information is in a filing cabinet.
Computers store data using a similar hierarchy.
DRAM acts as a cache for the disk. Although DRAM is faster than the disk, it's still pokey. This may be located on a separate, high-speed static RAM chip next to the CPU, but new CPUs usually incorporate the L2 cache directly on the processor chip. This is the fastest memory of all. The L2 cache on the CPU chip can be accessed four times faster than if it were on a separate chip.