Download the built binaries from https://github.com/mhx/dwarfs/releases/tag/v0.7.0-RC3

After that install fuse-overlayfs using : sudo apt-get install fuse-overlayfs

I also installed the dependencies so there might be some other things you need to install but there is no need to build dawrfs from source.

tar.xz files are compressed files. uncompress them first then you will find the binaries. copy them to /usr/bin or /usr/local/bin with sudo. also chmod +x them if they aren't already set to be executables