A dematerialisation circuit was an essential part of a TARDIS which enabled it to dematerialise from normal space into the Time Vortex and rematerialise back from it. (TV: Terror of the Autons) The Doctor's Type-40 TARDIS used a Mark I model dematerialisation circuit, while the Master's TARDIS used a Mark II.
During his exile on Earth, the Time Lords removed the dematerialisation codes from the Third Doctor's mind and deactivated the dematerialisation circuit of his TARDIS. He coveted the Master's working dematerialisation circuit, and when the opportunity struck he swapped it for his own defective circuit. Although he learned he could not use the Mark II circuit with his TARDIS, the Doctor was cheered to realise the Master was now as trapped on Earth as he. (TV: Terror of the Autons, The Mind of Evil, PROSE: The Eight Doctors) Once the Time Lords had rescinded the Doctor's exile as thanks for his defeat of the renegade Time Lord Omega, they also restored his knowledge of the dematerialisation codes and provided him with a new circuit. (TV: The Three Doctors)