Hydrated Lime Mortar
When people refer to lime mortar they're generally referring to mortar made with hydraulic lime or fat lime putty, sand and no cement. However, for most modern bricklayers and builders, the only exposure they've had to lime products is hydrated lime.
Hydrated Lime is readily available at the local builder's merchant and can be used to increase the workability of cement mortar. It is used more widely in schools and training centres where it is mixed with sand (no cement) to make a mortar that doesn't set, ideal for teaching brickwork.
Naturally, many people new to lime mortar assume that hydrated lime is the key ingredient, they know by experience that they'll need cement to make it set. Unfortunately this couldn't be further from the truth and is pretty much contrary to the use of lime mortars altogether.
True lime mortars contain hydraulic lime or fat lime putty (non-hydraulic lime). These two types of lime do indeed set with no need of cement, albeit more slowly than cement. The real goal with lime mortar is to eliminate the use of cement which is unnecessarily strong, rigid and is not breathable.
Natural lime mortars are flexible, allowing for movement in the building and thus preventing cracks in the masonry. Furthermore, they are breathable (vapour permeable), drawing the vapour present in the masonry back out into the air. This breathability naturally draws out damp and also helps to prevent freeze thaw action.