Dynamic lists are configurable on the Dynamic Lists option page. The page is language-dependent, so you can create and use language-specific dynamic lists. Here is what it looks like:
Template dynamic lists make a single code template universal and dynamic. For instance, a template for a variable declaration can be configurable on the fly by specifying its type. In other words, a template can be expanded differently depending on the selected dynamic list. A dynamic list contains a list of possible template alternative expansions (types when used with a variable template) for a single template.
The DynamicLists service provides methods for working with dynamic lists. Note, that it is only used internally and hidden from Intellisense but can be used for your purposes if needed.