Dynamic Range is simply your cameras ability to capture the lightest shades of grey alongside the darkest ones. Any camera (big or small) only technically really sees shades of grey...Did you know that humans amazingly are able to distinguish between 30 shades of grey. The current cameras as of 2016 can capture half of that, around 14.7 shades of grey (Sony A7).
|How your camera interprets a scene..more grey, more shade detail,|
recover unseen shades during post processing with higher dynamic range
A quick summary of current cameras DR range...
Sony A7- 14.7 EVs
Nikon D800- 14.4 EVs
Nikon D7000- 13.9 EVs
Canon 5dIV- 13.6 EVs
Canon 5d3- 11.7 EVs
Canon 5D2- 11.9 EVs
interesting, a 5D2 has higher DR vs a 5D3, but 0.2 is doesn't really matter
Which leads us to the conclusion why most Underwater Photo pros choose Nikon over Canon and Sony is closing in, but with its current poor battery life (Sony A7) and expensive lens offerings, it negates the few improvements in range so Nikon is still the camera of choice.
Dynamic Range is a by-product of sensor size, why I didn't even touch on compact cameras and mirrorless EV ratings, a smaller sized sensor delivers less dynamic range, so it gives you much less detail during post processing, why compacts and mirrorless, while very capable cameras will miss shades which may be critical for your final desired image.
I personally use a Canon 5D2 till this day (2016) since I have two bodies (in case I drown one, happened to me four times already) and I'm quite content with 11.9 EV range since I shoot full manual, meter a scene properly and know where to position myself relative to the available light sources (sun+strobes) and subject/wide scene... knowing the limits and what shades I may pull during post while capturing a subject/scene.
Hope this helps and sheds light about Dynamic range and underwater photography,