Loc is a common modern term for dreadlocks; in modern parlance both dreads and locs might be used to refer to dreadlocks, but the tone is rather different. A lot of people avoid 'dreads' and 'dreadlocks' because the word dread is, to belabor the obvious subtext, dreadful. In fashion the term loc is becoming increasingly more common, with butterfly locs, microlocs, sisterlocks, and just plain traditional locs proliferating.
While usage is still flexible, locs tend to refer specifically to African and especially African-American hair; while anyone might have dreadlocks, locs are fairly limited to styles designed for and primarily worn by African-Americans, especially women. Contrarywise, not all locs are dreadlocks, as any style that looks a bit like traditional locs may use the term.