I've had the same question, after some research i found out the following
if you have list of objects, and you are trying to update this to the DB, only few have been changed, if you update this to the db, only those which are modified are updated. this is automatic dirty checking.
Dynamic update is when you have only a few columns updated in a object. hibernate will updaate the update query and save the date into the db, but this has some performance issues, unless you are updating into a bigdata.
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