A dynamic HTML file is a script that is processed by the server before serving a browser the HTML.
A dynamic HTML file often uses another suffix such as .php or .aspx. This tells the web server that the document is not a straight text document but needs to be processed before serving it to the browser.
Such dynamic documents will generate HTML on the fly and often uses data you may have input. For example, if you fill out a feedback form with your name on it then send it off, you might be taken to a page that thanks you and refers to you by name. It got your name from the feedback form, and generated the HTML, using your name.