Dynamic actions allow you to add flexibility and control to actions on your record pages. Assign dynamic actions in the Lightning App Builder instead of in the page layout editor, and then apply filters to control when and where actions are visible to users.

For Visual Learners: Salesforce Dynamic Actions

You can create dynamic actions for standard and custom objects on mobile and desktop. Dynamic actions are supported by default on custom objects on mobile. To enable dynamic actions on standard objects, from Setup, in the Quick find box, enter Mobile, and then select Salesforce Mobile App. Enable Dynamic Actions on Mobile.

Check out this video to see how dynamic actions work on mobile devices.