GCSE Physics

Can someone explain how a dynamo works.

I can't remember how much you need to know at GCSE, you might have better luck on Bitesize or something.
The essence of how a dynamo works is that according to Faraday's law, a varying magnetic field induces an electromotive force (e.m.f) (another term for potential difference or a voltage if you will) in a closed circuit.
The strength of this effect depends on how fast the field varies, how many coils your wire has and the strength of the field itself.
In a dynamo a coil of wire is rotated inside a fixed magnetic field, relative to the wire the field then varies and so an e.m.f is induced.
A dynamo usually has a commutator to ensure a more useful direct current output is generated rather than the AC output that would otherwise occur, essentially half way through the rotation the connection of the wires is reversed meaning that the output is still DC, a better explanation can be found here.