A dynamic entity points to data residing in an external data source. Therefore, dynamic entities allow you to work directly with the external data stored in a database, file, or table, instead of creating a virtual image of that data in a TSS repository.
Note: Although you work directly with the physical data, the data is never overwritten.
One of the benefits of dynamic entities is that they allow you to use data that is current for your actions since you can, at any time, refresh the data. Working with dynamic entities is like auditing your data.