Dynamite comes in sticks with fuses that stick out of them. Once lit, they are tossed at a hostile and will damage or kill them. It only requires 1 Strength to use this very lightweight explosive weapon. However, it has a rather small blast radius for an explosive, which reduces its effectiveness against groups of enemies, while at the same time making it less of a friendly fire hazard.
Alternatively, one may place it on the ground by dropping it and then detonate it by gun fire or another explosive. Unlit dynamite sticks detonated by external means deal 75 explosion damage, unaffected by the Courier's skill or perks. Dropping multiple sticks as a single pack will only yield the effect of a single stick. Detonating dropped sticks will add up, however.
Contrary, when an ignited (thrown) dynamite is shot the resulting explosion deals no damage.
Despite having words "inert" on both sides of the stick, near the fuse, the stick of dynamite is very much capable of exploding.
It also has two American flags on each side of the stick, which look like the real-world American flag, as opposed to the different design used in the Fallout universe.
For the quest Ghost Town Gunfight, Easy Pete can be convinced to hand some dynamite over to the player character if they can prove they can handle the sticks without killing everyone. This requires a skill of 25 in Explosives.
Dynamite can be obtained by killing Powder Gangers, such as the ones outside of the player's starting area or by storming their base at the NCR Correctional Facility.
Dynamite can be obtained every 3 days from Eddie of the Powder Gangers if one is liked enough by them.
Some convicts carry dynamite, although they aren't a very reliable source.
PC Somewhere along the way you may pick up a dynamite stick with 0 durability. This will always be the very last stick of dynamite you use in your stack. If you attempt to use this last stick, the game will crash. Placing the dynamite in a storage container and re-looting it fixes the problem. [verified]
PC If you get knocked down when holding dynamite, the dynamite may fly away. When you then return to first-person view, the dynamite model may have disappeared from your hand (still looks like you are holding invisible dynamite), you can still throw that dynamite and the next one you'll pick up will be visible. [verified]
Xbox 360 Damage is not increased by Demolitions Expert perk. Confirmed for the Long-Fuse variant. Appears to be the case for all dynamite-based weapons (i.e. powder charge, etc.), though this has not been thoroughly tested. (Fixed with Patch 1.4) [verified]
Playstation 3 When igniting the dynamite, the screen will suddenly move upwards by a small amount jerkily and offset your aim. This however does not affect the trajectory of your current throw and may cause some confusion as to where your dynamite is going to land, a fix is unknown at this time. [verified]
PC If there are 2 enemies engaging the Courier in combat, selecting 1 of the 2 targets in V.A.T.S with the dynamite equipped, the unselected enemy(s) will move normally and as if not in V.A.T.S, even though the throwing animation and target is in slow-motion. [verified]
Playstation 3 If you throw five or more dynamite very quickly, it will crash the game. [verified]