Dynamic compilation happens for a website project not for a web application project.
If the site is very large, dynamic compilation of a Web site project might take a noticeable amount of time. Dynamic compilation occurs when a request for a site resource is received after an update to the site, and the request that triggers compilation might be delayed while the required resources are compiled. If the delay is unacceptable, you can pre-compile the site. However, then some of the advantages of dynamic compilation are lost.
Source: MSDN | Asked In: Some Interviews |