Dynamic DNS (DDNS) is the system through which updates to address assignments through DHCP are reflected in the DNS records for the hosts.
DDNS enables a DNS server to accept updates regarding the IP addresses leased to DHCP clients. The DNS server receives an update every time a dynamic client changes its IP address. The DNS server then associates the IP address with a DNS name for the client. Dynamic data for an address is maintained if the DDNS Updates option is deployed in the DHCP range containing the address. Any records that are generated dynamically are clearly marked as such when looking at the records for the zone. Dynamic updates are always deployed immediately to the managed server where they were generated.
It's common for DNS on the internal side to allow dynamic updates to the DNS server. Dynamic DNS eliminates the need for an administrator to manually enter large numbers of records. Rather than using dynamic updates, authorized users (or DHCP servers themselves) can add, delete, and change records on the fly. However, making use of DDNS does have the potential to open your network up to certain vulnerabilities. In the wrong hands, dynamic updates can allow a user to dynamically update some or many of the records on an organizations’ DNS server with bogus information. As such, dynamic updates should be restricted as much as possible.