A transformer is made of two coils of insulated wire wound on the same iron core. The coil connected to the input supply is the primary coil. The coil connected to the output is the secondary coil. The two coils are not connected by wire, only by the iron core.
An alternating current in the primary coil produces a magnetic field that keeps changing size and direction. The iron core carries this changing magnetic field through the secondary coil. A changing magnetic field passing through a coil induces a potential difference across it, so the secondary coil has an alternating potential difference induced in it. If the secondary circuit is complete, an alternating current flows.
A transformer only works with alternating current. A direct current gives a steady magnetic field. The field through the secondary coil does not change, so nothing is induced.
