What is a blow off valve?

A "dump valve" or "blow-off valve" (BOV) and a "compressor bypass valve" (CBV) do the same thing, which is to release compressed air in the intake tract when the throttle closes, so as to prevent high pressure from smacking back into the compressor wheel of the turbo. If the valve vents the relief air to atmosphere, it's a blow-off valve or dump valve,  if it sends the air back to the intake, it's a compressor bypass valve.  To explain this more refer to the diagram.



When the turbo is working it is drawing in air through the air intake and blowing air at high pressure into the engine (follow the red line).  If you ease off the accelerator then you are closing the duct (throttle body) through which this air enters the engine.  This causes this high pressure to bounce back along the route it came from (follow the green line) and smacks into the turbo thus stopping the compressor wheel from turning.  This is turbo stall.  When you accelerate again the turbo has to get back up to speed again (spool up).  A blow off valve will allow this excess pressure to be vented to the engine compartment (thick orange line) thus reducing turbo stall and helping with spool up.  A bypass valve vents this excess pressure into the air intake on the other side of the turbo (thin orange line) and this not only relieves the pressure on the compressed side of the turbo but the increase in pressure on the air intake side helps to keep the turbo turning.

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