A dynamic filter is a functionality which helps you decide what filters do you want to apply on the dashboard while viewing it.
It simply means that whoever is viewing the dashboard will be able to change these filters and get to see the updated dynamic dashboard. These filters help when you want to have a single template of reporting but have personalized reports for different regions/ people/ hierarchies.
A static filter is one where the value to be filtered is predefined and when applied it cannot be changed at any point. It will always filter the data in the same way for all the viewers.