|“||Somewhere else, not here, there is a woman wandering a desert—a desert not unlike this one, but not like this one either. It's not the same desert, I need to clarify that.||”|
The desert otherworld is an other dimensional desert not part of the regular empty desert surrounding Night Vale, which seems to surround a parallel-universe version of Night Vale, and is populated by a masked army who spends their time battling with other masked armies. There appear to be multiple ways to enter the desert otherworld, including via the dog park. A horoscope refers to it as "an alternate desert dimension."
Time seems to go much faster in the otherworld. People who spent a few weeks in Night Vale time reported living in the otherworld for nine months. Carlos revealed to Nilanjana Sikdar that the "year" (from the perspective of Night Vale) he spent trapped in the otherworld lasted ten years for him. 
Dana found herself in this desert after exiting The House That Doesn't Exist. She left the house and found herself in the empty desert, while the house actually fails to exist (at least in the "Night Vale prime" dimension) in the Desert Creek Housing Development in Night Vale.
Cell phones seem to be completely, if intermittently, functional while in the desert. Intern Dana sends frequent texts to Cecil, and occasionally is able to call him. However, it is rarely possible to respond to contact from the Empty Desert, and when Cecil attempts this, his touchscreen will crack and leak blood, or show a picture of his face, rotting and covered in flies. When Carlos ends up in the alternate desert, his communication is much more stable, and two-sided, sending and receiving frequent texts and snapchats.
In Dana, while out in the parallel dimension empty desert, Dana is briefly trapped in a "geographical loop" surrounding a mountain with a red blinking light on top of it in the distance.
In A Blinking Light up on the Mountain, the mountain with the red blinking light suddenly appears in the empty desert outside of Night Vale itself, rising out of a great alluvial floodplain strewn with bones. A great masked army then appears in the desert, marching towards Night Vale. Residents are terrified for their lives, but the army turns out to simply be on their way to attack somewhere else, passing through Night Vale and supporting local businesses on their way.
In WALK, Dana journeys to the mountain, finding a deserted settlement bound inside the stone walls of a tightly wound spiral gorge. The walls of the gorge were covered in strange drawings of orange triangles with soft light around the edges. She also describes a lighthouse on the mountain, 40 feet tall, 15 feet in diameter, made of brown stone.
In Old Oak Doors Part A and Part B Dana returns to Night Vale with the masked army to fight StrexCorp, and after the battle ends the em marked army returns to the desert otherworld, while Dana becomes the new mayor of Night Vale. At the end, Carlos reveals he is now trapped in the desert otherworld, since he isn't from Night Vale, but he quickly becomes optimistic about it, because the desert otherworld is so scientifically interesting.
In Voicemail, Carlos discovers a group of people who entered the Forbidden Dog Park with Dana during Poetry Week, and concludes that the desert otherworld must be the Forbidden Dog Park.
Kevin was revealed to be living in the desert otherworld as well, and he, Carlos, and the masked Warriors had set up a small community to live in, including a radio station. Cecil revealed he planned to move out of Night Vale to go live there with Carlos in Fashion Week.
In Taking Off, Kevin began broadcast into the desert otherworld, and decides to give the location a better name, as names are important, and decides to call it New Desert Bluffs, in honor of his hometown Desert Bluffs. In Review Carlos returns to Night Vale to be back with Cecil, after a terrible day with the masked army ruining many of the things he thought he was accomplishing in New Desert Bluffs.