A hard reset basically force-reboots your iPhone, which is useful if the device is freezing, throwing up errors, or has stopped responding completely. DFU mode, on the other hand, restores an iPhone if a reset or standard Recovery Mode doesn't solve the problem you're experiencing.
DFU mode lets the device interface with iTunes, update the firmware and restore the OS without automatically installing the last downloaded version. It's useful for installing older versions of iOS if a beta persistently hangs your phone, or if a jailbreak goes bad.
Note for iPhone 6s and earlier owners: Apple has had to alter the hard reset process and DFU mode activation on the iPhone 7 because the physical-click home button has been replaced with a Force Touch-based Taptic Engine, which is rendered unresponsive if the OS isn't functioning properly. Owners of iPhone 6s/6s Plus or earlier devices should therefore consider all mentions of the "lower volume button" in the below steps to indicate when the home button should be held down instead.
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Article Link: How to Reset an iPhone 7 or Enter DFU Mode for Last-Ditch Recovery
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