The Ethereum website defines Ether as follows:
“Ether is a necessary element – a fuel – for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, Ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources)”.
This means that any developer who builds a DApp on the Ethereum blockchain will need to fuel it with Ethereum. This is also true for smart contracts to work. Transaction fees on the blockchain for DApps and smart contracts are based on gas prices and limits and are paid for using Ether.