A picture book dummy is a mock-up of the book how you envision it. So yes, you would fold the pages and make it into a book. If you print out the pdf, you could paste it into a blank dummy of folded and stapled paper. It doesn't have to be fancy, it just has to work so that the publisher or agent can turn the pages and see how you illustrate the story. Some people want a digital copy instead of a hard copy. In that case you would send the pdf by email or digital upload if they ask for that. Good luck with your submission.