Dynamic DNS(Domain Name System) is an extension to DNS, that allows to update the IP address of a domain in real time. In the internet world, domain names resolve to IP addresses.
Eg: When someone visits www.google.com, the browser hits a DNS server to resolve the domain name to IP address. Once a connection is established, further subsequent calls will take place to and forth.

In common mans term, DNS servers can be assumed to be a phone book for the internet, where if know a persons name, we can get access to the details of the person. Without DNS decoding, users would be forced to enter the actual IP address ( instead of domain nomain (http://www.google.com), which is an alias to the IP address in reality.

You can read more about Dynamic DNS here.

Dynamic DNS can be setup on any computer server with minimum setup requirments, ie. changing the maximum caching time or the time intervas between caching of a domain, to a very short period. The time could be set between one to two minutes. Thus preventing storage of IP address, allowing visitors to a particular site to update their old information by contacting the name server on successive visit.

Dynamic DNS has its footprint in home server marketplace. Soon this method or protocol is gaining momentum with the computer technology and increasing speed in internet. Today, numerous providers called Dynamic DNS service providers, offer such technology and services on the internet.

Microsoft Windows networks offers it as an integral part of Active Directory, because domain controllers register their network service types in DNS so that computers in the Domain (Forest) can access them.

[What is Dynamic DNS?].