This info from Sharon Mujica:
"The Day of the Dead is a tradition that goes back to the time of the Aztecs. Through the years, this celebration has become a fusion of the Aztec and Catholic traditions. Currently, the Day of the Dead is celebrated on November 1st, which is dedicated to the souls of children, and November 2nd which is dedicated to the souls of adults. During these two days, family members visit the graves of those who have died and build offerings which are created using specific elements. It is
believed that the spirits of those that have passed come back to this world to share with their loved ones and to enjoy their favorite dishes which are placed in the offerings.
In honoring the dead, El Pueblo also hopes to focus attention on "preventing premature or unjust deaths."
There are a lot of guides and images online for Day of the Dead altars; I suggest you do your own search. Here's one with directions on how to make your own.
Here's another page on Day of the Dead traditions by the UNC Institute for the Study of the Americas.
More info on the holiday from the Consortium in Latin American and Caribbean Studies at Duke and UNC.