upgrade

upgrade is used to install the newest versions of all packages
   currently installed on the system from the sources enumerated in
   /etc/apt/sources.list. Packages currently installed with new
   versions available are retrieved and upgraded; under no
   circumstances are currently installed packages removed, or packages
   not already installed retrieved and installed. New versions of
   currently installed packages that cannot be upgraded without
   changing the install status of another package will be left at
   their current version. An update must be performed first so that
   apt-get knows that new versions of packages are available.

dist-upgrade

dist-upgrade in addition to performing the function of upgrade,
   also intelligently handles changing dependencies with new versions
   of packages; apt-get has a "smart" conflict resolution system, and
   it will attempt to upgrade the most important packages at the
   expense of less important ones if necessary. So, dist-upgrade
   command may remove some packages. The /etc/apt/sources.list file
   contains a list of locations from which to retrieve desired package
   files. See also apt_preferences(5) for a mechanism for overriding
   the general settings for individual packages.