An Item Dump refers to a specific event that occurs in virtually every Criminal Plot. In this event an Item, previously in possession of one of the Participants, disappears from the game. This can symbolize the item being "used-up", "stashed away", etcetera.
An Item Dump most commonly occurs during the perpetration of a Crime - almost always the Major Crime of the Plot. Items that have made their way to the Major Agent during the course of the plot are "Dumped" in the process of the major crime, having been "used up" as tools for that crime.
When this occurs, the item in question disappears from the game, having fulfilled its purpose. This is similar to an enemy agent Going into Hiding - it will no longer be possible to Confiscate the item since it no longer exists in the game world.
Item Dumps don't always occur during a Crime - in at least two plots, a Participant will dump an item from their possessions as a stand-alone event. For example, depositing a payoff into a secret account.