Main sequence stars, also called dwarf stars, are stars that fuse hydrogen in their cores. These are dwarfs in that they are smaller than giant stars, but are not necessarily less luminous. For example, a blue type O dwarf star is brighter than most red giants. Main sequence stars belong to the luminosity class V.
There are also other objects called dwarfs known as white dwarfs. They are not main sequence stars but stellar remnants instead. Unlike true stars, brown dwarfs have too little mass to sustain nuclear fusion so they do not belong to this category either. The border between the lowest-mass main sequence stars and brown dwarfs is somewhat ambiguous.