a mass of solid impurities floating on a molten metal. It appears usually on the melting of low-melting-point metals or alloys such as tin, lead, zinc or aluminium, or by oxidation of the metal(s). It can also consist of impurities such as paint leftovers. It can easily be skimmed off the surface before pouring the metal into a mold or casting flask.
It is a bit like "slag" except that slag is a liquid and dross consists of solids. The important thing here is that it is produced by smelting, i.e., the process by which purer metals are extracted from ore. It is the byproduct of the process by which raw materials are converted into, let us say, precious ones. While it can be considered a "waste" product from the point of view of smelting, some of the solids in dross are still useful for other purposes. They can be used as raw materials in other processes, but for the purposes of Pound's metaphor, we can see it as something to leave on the side.
It should not be hard to imagine how this might apply to writing, say, a journal article. Think of part of the writing process as the exposure of your materials (whether empirical or theoretical) to the heat of your intelligence (later you will also need to expose them to your light). You are trying to extract something of value from some relatively crude or "raw" experiences (field notes, interview transcripts, notes from your reading, and, of course, the experiences that produced them as retained in your memory). Your original encounters with your subject matter (again, it doesn't matter whether we are talking about the things you've read or the people you've talked to, your encounters with your peers or with your objects) have given you materials that contain the elements you need for your paper, but they are mixed together with a lot of things you don't need. Things you can't use (from lack of expertise) or don't want (from lack of interest). You "heat" up your materials, separating the metal from the dross, then you skim off the dross (perhaps keeping it somewhere to look through later for nuggets of unexpected wisdom) and pour the molten metal, now pure, off into a mold where it can cool.
You will probably not pour it into its final shape, mind you. You may have to melt it down again and reshape it, but, like pure gold or iron, melting it now (or just heating it a little to make it more pliable) does not produce more waste.
The idea that the research process, and especially the writing process, produces a lot of "waste" is an important one to understand. Don't think of your first experiences, the process of gathering materials, as providing you with knowledge, ready-made. Remember that you have to subject those materials to a process that refines them to suit your research project. You have to extract the pure metal from their raw ore.
There appears to be a connection between the German word for "slag" (Schlacke) and the American Yiddish "schlock", which denotes something cheap or shoddy. When I read what I would call "shoddy" writing in the academic journals it is precisely the dross that was not skimmed out of a paper that I am noticing. My sense, after working with many authors, with various degrees of love for their subject matter (note that heat is famously measured in "degrees"), is that, where dross remains, the intellectual temperature was simply not high enough. The materials were loosened up just enough to fit them together after a fashion, but irrelevant materials were never separated from the mass.
Think of your love for the research you do or the people in your life as a kind of heat. You apply this heat in order to separate out the pure or perfect elements from your experience of the raw, messy "stuff" that things and people of course also are. "The intellectual love of a thing," said Spinoza (with Pound's abiding approval, SR, p. 93), "consists in the understanding of its perfections." And "the rest," of course, "is dross".