Light micrograph of a section through a human female ovary with a dermoid cyst. A dermoid ovarian cyst of the ovary is a bizarre, usually benign, tumour in the ovary. The cyst develops from a totipotential germ cell (a primary oocyte) that is retained within the egg sac (ovary). Dermoid cysts are caused when skin and skin structures become trapped during fetal development and may contain multiple skin structures such as, hair follicles, sweat glands, teeth, nerves and sometimes hair. Dermoid cysts are a congenital condition, which mean they are present at birth.