Dynamos produce electric current by rotating a wire within a magnetic field. Another method rotates a permanent magnet around coils of wire. Both processes produce alternating current because the wire passes between two magnetic poles every half turn. A commutator can turn the alternating current into direct current pulses, a common practice in early days before alternating current became the standard. 

The dynamo  includes a fixed magnetic field called a stator, an armature wrapped with the wire that rotates within the stator, and a commutator on the armature that acts like a switch between the positive and negative current generated with each rotation, sending current in only one direction with each half rotation. Smaller dynamos, like those found on bicycles, use permanent magnets, while larger dynamos need electromagnets.

Dynamos were the first type of electric generators. When engineers started understanding and using alternating current, the dynamo fell out of favor because the commutator requires mechanical contacts that rub against the armature. These contacts wear down over time, so most modern electrical generators, that need direct current output, simply convert the alternating current using diodes.