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I think dynamic SEO refers to 'optimization for dynamically generated pages'.
For instance, search result pages like,
site.com/s?query0.html
site.com/s?query1.html
site.com/s?query2.html and so on.
These pages are dynamically generated based on the query so, 'e-commerce sites' or 'News feed aggregators' might use this to create pages on-the-fly. And, generate an optimized page with (queried) keywords in the Title of the page, meta keywords etc., on the page, thereby generating an optimized page, dynamically.
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