Learn Russian: Дети украшают ёлку. - The children are decorating the tree.

Russian has a few highly irregular plural nouns, and this is one of the most common. The singular word for a child is ребёнок, but the plural completely changes to дети.

What case is ёлку in and why?

It is in the accusative case because it is the direct object of the verb (the thing being decorated). The dictionary form is ёлка, a feminine noun ending in -а, which changes to -у in the accusative.

Does ёлка just mean any tree?

No, the generic word for a tree is дерево. The word ёлка specifically refers to a fir tree or spruce. In Russian culture, it is the standard term for a New Year tree (their equivalent of a Christmas tree), which is what is happening in this sentence.

What is the dictionary form of украшают?

The infinitive is украшать (to decorate). It is a standard first-conjugation verb. Because the subject is дети (they), we drop the -ть and add the -ют ending.