The Wiki article hits it.
Qualia do not refute physicalism in Dennett's view. Consciousness isn't a physical object in and of itself whereas physicalism says that everything that can be considered real MUST have a physical counterpart. Dennett, whose cagey on these matters, seeme to believe the experience of consciousness is itself a quale, i.e. it is the way it appears to us. We think ourselves as having a consciousness but it is an illusion that arises from the workings of the brain-body complex.
The brain creates "multiple drafts" of reality but these are not edited together into a seamless whole and presented to consciousness. It just feels that that. To Dennett, there is no need for this. The multiple drafts work just by themselves. They don't required editing into a seamless whole.
There is some truth in that. We know, for example, that we don't decide to do something. Neurologists have found that the brain decides on a course of action and only then does the mind kick in with what appears to be a conscious decision. To us, it appears we took this course of action because we decided to--it was voluntary. In reality, the brain made the decision and consciousness went along wtih it without realizing it had made no decision. In this way, consciousnes does indeed to appear to arise after the fact.
In this way, it is an illusion.