Hydrophobic sand is made of regular sand particles which are coated with a water repellent (hydrophobic) thin layer, typically made of a special chemical treatment vapors of a silicon compound called trimethylhydroxysilane. As a result of this hydrophobic coating, water repellent sand attempts to minimize their surface area under water by adhering to one another. Once the sand is removed from water, it is completely dry.
This page includes some videos of the response of hydrophobic sands to water. All the experiments shown in these videos are performed at the Sustainable Geotechnics Laboratory at Stony Brook University by Professor Abdelaziz.