Founded by former University of Dayton and Central State University coach Jerry Butcher, the Dynamo joined the AISA as one of two expansion franchises (the other being the Jacksonville Generals) playing in the post-season "Challenge Cup" Series. The franchise began regular-season play at Hara Arena starting with the 1988-1989 season and moved to the Ervin J. Nutter Center at Wright State University for the 1990-1991 season. The Dynamo played its last two seasons in Dayton at the 4,600 seat capacity Dayton Convention Center.
The Dynamo finished last in the league during the team’s first two seasons. In the 1989-1990 season, the Dynamo won the National Division, but the squad lost to the Canton Invaders of Canton, Ohio, in the championship series. The team returned to the championship round the following season, losing to the Chicago Power this time. During the 1991-1992 season, the Dynamo, now in the National Professional Soccer League’s American Division, finished last. Over the next three seasons, the team finished no higher than fifth in its division. Declining support from Dayton fans prompted the Dynamo to relocate to Cincinnati, Ohio, at the end of the 1994-1995 season. In Cincinnati, the squad became known as the Cincinnati Silverbacks