Reefs can occur far from dry land, in fact, they dot the Pacific. They are called 'atolls'. Here's the excerpt from http://encarta.msn.com/encyclopedia_761556011/Atoll.html "Atoll, ring-shaped coral reef surrounding a lakelike body of water, known as a lagoon. Atolls are found in tropical and subtropical seas, especially in the Pacific and Indian oceans. Believed to form on the flanks of an underwater volcano, an atoll may project above the surface of the water either as a single island or as a chain of islets. Ordinarily the island or islets rise 4 to 6 m (13 to 20 ft) above sea level. Most of the reef lies just below the surface of the water and is often exposed by waves and tides. The lagoon is quite deep, generally 20 to 30 m (60 to 100 ft) and up to 90 m (300 ft) deep. The word atoll comes from the Divehi language, which is spoken in the Maldives, an island nation in the Indian Ocean. Atolls, like other coral reefs, are made primarily of limestone of biological origin. The limestone results from the accumulation of the skeletons of certain marine organisms, mainly corals and coralline algae. These skeletons contain calcite, the mineral found in limestone. Atolls commonly consist of broken or pulverized limestone thrown up by wave action and often piled in small dunes by the wind. The outer shore of most atolls is made up of a narrow fringing reef, often with a smooth rose-colored rim, and a steep, narrow beach of broken or wave-rounded limestone fragments. Inside the crest of the beach the material changes to rubble, which becomes finer, changing to gravel, as one travels inward on the island. In the center of the island or islet often lies a brackish depression with a mucky soil. The inner half of an atoll ordinarily consists of a coarse coral sand or fine gravel, and the inner beach is of fine calcite sand. If the atoll is at all raised above sea level, the limestone is usually weathered to a rough surface known as makatea. Any groundwater lies very near the surface, and shallow wells are often dug at or near the center of the atoll. If the island is large or receives a lot of rainfall, the water tends to be fresh. If it is small or in a less rainy region, the water is brackish or salty." One of the most important battles in the Pacific theater of WW II took place over an atoll; the Midway atoll. Winning the battle over Midway was the turning point for the United States' efforts in the Pacific. Read more about this historic battle at: http://www.history.navy.mil/photos/events/wwii-pac/midway/midway.htm

I think the other answer missed the point of the question. A living reef is made up of coral that consists of tiny organisms called polyps. These polyps feed on the phytoplankton that are dependant on sun light for nurishment. The polyps need an anchor to keep from being washed away. So, the requirements for a coral reef is shallow water so sun light can penetrate, and a solid base to act as an anchor, and a good supply of plankton. Of course unpolluted water is needed too. The atolls described earlier are formed from underwater volcanoes that grow to near the water surface. The corals then use this shallow platform as a base for growth. That is why allot of these atolls are round with a hole in the center.

Yes it can occur, when oceanic island sinks below the surface of the ocean but the coral reef continues to grow upward. In this particular case is called atoll. So it occurs in the middle of the Ocean, but is not far from land.

Anytime the bottom is shallow enough and receives enough sunlight, nutrients and warm water a reef can form. Dry land is never necessary.