Just how does a dynamo work?
There are two main components to a dynamo, the armature and the field coil.
The field coil provides a magnetic field which the armature windings pass through. The field coil is wrapped around the pole shoe and the pole shoe holds a very small residual field from when it was last running. When you start to rotate the armature the windings pass through the residual lines of magnetic flux.
Passing a wire through a magnetic field generates a voltage in the wire proportional to the speed at which it cuts the field and the strength of that field. If there are lots of turns as there are in an armature coil, then each of the wires cutting the field generates a voltage having a cumulative effect.
The coils in the armature are connected to the commutator, so that the voltage generated in the coils of the armature by rotating it in the magnetic field is present across the commutator. To make use of this voltage that has been produced we need to connect to the commutator. This is done using carbon brushes, which touch the surface of the commutator, and as the armature spins the brushes tap off the output voltage.
This output is then connected across the field coil, through a voltage regulator. If the voltage is less than the control voltage then the voltage regulator contacts remain closed and allow the current to flow from the positive brush through the field coil and back to the negative brush, completing the circuit.
Now some current, although small, is passing through the field coil. As current flows through a wire it generates a magnetic field around the wire, and if that wire is wound into a coil i.e. the field coil, then that magnetic field is concentrated. And the field strength is proportional to the number of tuns and the amount of current passing through it, or Ampere turns, and the current is dependent on the resistance of the circuit, and the voltage behind it.
So a small current is now passing through the field coil which is generating a magnetic field itself because of the current flowing through it. This makes the magnetic field stronger than it was initially when the system was relying on the residual field in the pole shoe. Now that the magnetic field is stronger when the armature coils pass through the lines of flux they generate more voltage. The resistance of the circuit is the same, but the voltage behind it is now greater, so the current flowing through it greater and this greater current is going through the field coil making the field stronger still, and generating more voltage this process carries on until the voltage is high enough to cause the voltage regulator to open the contacts, this breaks the circuit and causes current to stop flowing through the field coil, although the armature still spins it is now only generating what it can from the residual field of the pole shoe, but because the contacts on the voltage regulator are open no current flows. The magnetic field established by the field coil when current was flowing through it now collapses and causes a high reverse voltage spike across the voltage regulator contacts, this energy is absorbed by a capacitor, across the contacts, if the capacitor was not there then these spikes would damage the contacts. This whole process happens at about 10Khz
3 Brush Dynamos
On 3 brush dynamos they don't use voltage regulators because they were designed prior to there development. It is the 3rd brush that controls the output, by tapping of a voltage somewhere along the commutator, and using this tap of to supply the current to the field coil. By moving the 3rd brush towards and away from one of the main brushes, across the face of the commutator, the output of the dynamo can be controlled. This is often used in conjunction with a load resistor operated from a switch on the dash board, and will often require adjusting for seasonal conditions. Some more sophisticated units which tend to be earlier, have a compound winding in the field coil which opposes the main field coils. This was probably done because more ingenious ways had to be thought up to control the output.
The output terminals of the dynamo are connected to the positive and negative sides of the battery, so when dynamo generates a voltage higher that of the battery current flows to the battery charging it up, when the voltage generated by the dynamo reaches a voltage higher than the control voltage set by the voltage regulator, the voltage regulator opens its contacts cutting off the flow of current to the battery and stops it from charging.