Legend goes, that dotfiles were invented when ls used to skip files and directories starting with a . (dot). As a result, files that begin with such a character were not shown when listing using ls — i.e. it was a "hidden" file. Since dotfiles are usually user-specific, a predestined place for them is the $HOME directory.

Commonly used files are for example: .bashrc, .zshrc or .vimrc.