Indirect or reported speech
In Spanish and English, when we speak we can use our own words directly, employing direct speech. The exact words of the original speaker are reported in quotes.
For example:
Marina preguntó: "¿Dónde está el cine?" - Marina asked: "Where is the cinema?"
"No tengo tiempo" explicó Juan. - "I don't have any time" explained Juan.
When we want to report what someone else says or thinks, we use indirect speech (also known as reported speech). The original speaker's words are now reported without quotes in a subordinate clause (introduced by que). Indirect speech is more complicated than direct speech, because it requires certain changes in the elements of the sentence (tenses, time expressions, pronouns, etc.)
For example:
Marcos dice: "Necesito mi libro." (Direct speech)
Marcos dice que necesita su libro. (Indirect speech)
In Spanish you can use indirect speech when referring to present actions, and it's also possible to use indirect speech when talking about events and thoughts in the past and future. Note that these rules are more strictly respected in written and formal Spanish, and more flexibly used in spoken and informal speech.
More examples:
Laura dijo: "Iré contigo." (Laura said: "I will go with you.")
Laura dijo que iría contigo. (Laura said she'd go with you.)
Laura dijo: "Yo no lo he roto." (Laura said: "I haven't broken it.)
Laura dijo que ella no lo había roto. (Laura said that she hadn't broken it.)