The fundamental difference between Alternating Current (AC) and Direct Current (DC) is this: DC is a steady and relatively unchanging flow of current through a circuit while AC is a dynamic, that is: a continuously changing flow of current through a circuit.

Breaking this down a little further, DC can be likened to water flowing through a pipe from point A to Point B - we call this our circuit. A pump is required to physically move the water and in electrical terms, our pump might be a battery, charged capacitor or DC generator. Our water will continue flowing in one direction at a set rate determined by the power of our pump, which equates to the voltage of our battery, generator or capacitor. The direction of current flow is what determines polarity', which can be either positive or negative to keep things simple, let's just say our water will flow in whatever direction we set our pump motor to turn. Our current flow will stop if we open the circuit or turn off the pump - disconnect our power source. (Assume for this explaination that if we break the loop to open the circuit, we are sealing the break so water remains inside the pipes)

If we apply the same visualisation to AC, picture a lever that pushes a diaphragm fixed inside a water pipe backwards and forwards. The pipe is full of water throughout the entire sealed loop and the water cannot get past the diaphragm, but our diaphragm is fairly flexible as it stretches across the internal diameter of our pipe. As the lever is rapidly pumped from left to right to left and so on, the diaphragm pushes the water in each respective direction at a rate of however fast we are moving the lever. The water inside our pipe is therefore moving first from left to right a certain distance, stops before it reverses direction as the diaphragm flexes back in the opposite direction. This rate of change is what we call frequency.

So in summary, DC is a fixed rate of current flowing through a circuit, and AC is a constantly changing flow of current through a circuit. Both have very specific purposes in making things work, and have very different behaviour characteristics in a given electric circuit.