Fighter's History Dynamite is a 2D versus fighting game similar to Street Fighter II. It takes place one year after what happened in Fighter's History . The mysterious K invites fighters from all over the world once again. The nine characters from the previous game are present, along with two new ones, and two hidden characters from the previous game are also available as playable characters.
Each character has two punches and two kicks, and one or more unique throw moves. Special moves are performed by using control sequences such as moving the directional pad down, down-forward, forward and pressing a punch button. Combos can be performed by connecting sequences of moves. A "one-two attack" system was introduced in this game: pressing a hard attack button while performing a light attack or blocking reduces the interval between light attacks, making combos easier to perform.
There are two rounds in each stage, and the object of each round is to drain the opponent's energy in order to win the battle. If there is a tie after two rounds, a third round is played. The animated background for each character changes from the first to the second and third rounds. There is a time limit, and if this expires, the player with the less energy loses. The game can be played in single player or two-player versus mode.