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Dynamic Analysis involves examining software behavior while it is running, enabling testers to observe how changes impact functionality in real-time during regression testing. This methodology focuses on data-driven analysis and runtime observation, contrasting with Static Analysis which relies on code examination without execution. By employing Dynamic Analysis during Regression Testing, developers can isolate issues, pinpoint their causes, and assess the impact of modifications, thereby ensuring software reliability and robustness in an ever-evolving development landscape.