Mud is what you get when you mix dirt with water. Dirt is dry, mud is wet. Example: The car got stuck in the mud and we couldn't go to the store. The man planted the flowers in a pot filled with dirt.

Imagine you are making porridge (oatmeal). The dry oats have the consistency of 'dirt', more or less. When the porridge (oatmeal) is mixed with liquid and cooked, it has the consistency of 'mud'.