A dynamo is a
generator that produces
direct current, as opposed to an
alternator. It generally involves rotating an
armature in a
magnetic field. The armature consists of coils of wire connected to a commutator.
The commutator reverses the electrical connection to the rotating coils a number of times every revolution. This ensures that the current from the dynamo is always flowing in one direction, and is, hence, direct current. It is not stable direct current, though. You would not want to connect it to your computer without a filter and a regulator.
Dynamos have the same theory of operation as a DC motor, only in reverse. In fact, most DC motors will function as miniature dynamos if you rotate the drive shaft whilest connecting a load to its power terminals. True dynamos are designed to be more efficient for power generation, though.
Dynamos tend to be less efficient than alternators, and hence are used less often. You can produce direct current more efficiently by using an alternator with a rectifier and a filter battery or capacitor.