In the Christian tradition, November 2 is known as All Souls' Day, commemorating the souls of Christians who have died. They are collectively referred to on this day as All Souls, the Holy Souls, or the Faithfully Departed.
For observing Christians, it is a day of remembrance and dedication of prayers to deceased relatives. For western churches the day is observed on November 2, the day immediately following All Saints' Day, and it coincides with the Latin Day of the Dead. Eastern churches celebrate All Souls' Day prior to Lent on the day before Pentecost.
The first observation of All Souls' Day was in 993, at the monastery in Cuny, France. The abbot of Cluny, Saint Odilo, proposed the day in honor of the departed, but some scholars speculate that he was also incorporating already existing festivals for the dead. Catholic doctrine teaches that the soul after death goes to either heaven, hell, or purgatory. The latter is a necessary place of cleansing before a soul can enter heaven, and Catholics believe their prayers on Earth help speed up the process.
Unlike All Saints' Day just the day before, All Souls Day is not a holy day of obligation. This means catholics are not expected to attend mass. But if the date occurs on a Sunday, there is a Mass of All Souls held. Also on this day the Book of the Dead is opened in churches for people to write the names of the relatives they wish to be remembered.
Much like on All Saints' Day, observing Christians in the United States visit the graves of their relatives and place candles or lanterns on top of them. Day of the Dead is essentially the Latin version of All Souls' Day for Spanish-speaking countries, with additional traditions and speciatly food unique to their respective cultures.
The skull, representing both death and rebirth, is the symbol for both All Souls' Day and Day of the Dead.
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H/T: Time and Date, Catholic.org, Metro UK