Domain name resolution on the Internet is generally static, meaning that the IP address corresponding to a domain name remains unchanged for a long period. This implies that to set up a website on the Internet, a fixed IP address is required.

The function of dynamic domain names is to achieve resolution between a fixed domain name and a dynamic IP address. Each time a user goes online and receives a new IP address, the dynamic domain name software installed on the user's computer sends this IP address to the dynamic domain name resolution server, updating the domain name resolution database. When others on the Internet try to access this domain name, the dynamic domain name resolution server returns the correct IP address to them.

Because the vast majority of Internet users are assigned dynamic IP addresses when they go online, it is impossible for them to use traditional static domain name resolution methods to create a website with a fixed domain name. However, with dynamic domain names, this dream can come true. Users can apply for a domain name and use dynamic domain name resolution services to bind the domain name to their computer's IP address, allowing them to set up their own website at home or in their office conveniently.