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Condensate water is distilled water, but may also contain contaminants. If it is being condensed from an air stream, it may have entrained dust , microbes , or other contaminants in it. If it is condensed from steam, it may have traces of the various boiler water treatment chemicals.
A water dispenser, sometimes referred to as a water cooler (if used for cooling only), is a machine that dispenses and often also cools or heats up water with a refrigeration unit. It is commonly located near the restroom due to closer access to plumbing.