If you are trying to set a tone, use whichever mode the system uses that you are trying to listen to. If the system uses CTCSS, set the scanner to that mode, same for DCS. See the database on this site to find out what mode (CTCSS/DCS) the system uses. Also, you can set a search mode to make the scanner decode a CTCSS/DCS tone if you don't know it (see the manual).
Imagine you have two police departments on the same frequency, in the same geographical area. If there were no CTCSS/DCS tones, they will interfere, or walk on each other. If each agency is assigned a tone, they will only hear other radios from their department. This happens because when a radio is programmed with a tone, it only receives transmissions from radios with the same tone it has.
As a scanner listener, if you want to listen to Deparment A, you would look up their tone in the database, and program it into the scanner. If you don't know it, you can set up a tone search. With the department's tone programmed into your scanner, you will only hear THAT department, and no one else.
If you have ever used those FRS walkie talkies, they essentially use CTCSS exept they call them Quiet Codes. If you want to talk to someone else without hearing other people using the same channel, you both can set your walkie talkies to the same code, and you will only hear each other. It works the same way with CTCSS/DCS tones.