Dynamic Memory is Hyper-V memory optimization techniques. That came with Windows Server 2008 R2 Service Pack 1.
Dynamic Memory is really just an extension idea of hot-add memory ability feature of Windows Server Enterprise and Data-center editions. Memory is added to virtual machines while they run. But instead of plugging in large amounts, tiny amounts of memory are added to the virtual machine. This is done on an on-demand basis from the pool of available memory on the host.