fn - a function name.

In some containing form, F, this declaration asserts for each var_i (which need not be bound by F), and for each value v_ij that var_i takes on, and for each object x_ijk that is an otherwise inaccessible part of v_ij at any time when v_ij becomes the value of var_i, that just after the execution of F terminates, x_ijk is either inaccessible (if F established a binding for var_i) or still an otherwise inaccessible part of the current value of var_i (if F did not establish a binding for var_i). The same relation holds for each fn_i, except that the bindings are in the function namespace.

The compiler is permitted to use this information in any way that is appropriate to the implementation and that does not conflict with the semantics of Common Lisp.

dynamic-extent declarations can be free declarations or bound declarations.

The vars and fns named in a dynamic-extent declaration must not refer to symbol macro or macro bindings.

 (defun f ()
   (let ((x (list 1 2 3)))
     (declare (dynamic-extent x))
         ...))

This would permit those compilers that wish to do so to stack allocate the list held by the local variable x. It is permissible, but in practice probably not as useful, to write:

 (defun g (x) (declare (dynamic-extent x)) ...)
 (defun f () (g (list 1 2 3)))

Most compilers would probably not stack allocate the argument to g in f because it would be a modularity violation for the compiler to assume facts about g from within f. Only an implementation that was willing to be responsible for recompiling f if the definition of g changed incompatibly could legitimately stack allocate the list argument to g in f.

Here is another example:

 (declaim (inline g))
 (defun g (x) (declare (dynamic-extent x)) ...)
 (defun f () (g (list 1 2 3)))
 
 (defun f ()
   (flet ((g (x) (declare (dynamic-extent x)) ...))
     (g (list 1 2 3))))
 

A variant of this is the so-called "stack allocated rest list" that can be achieved (in implementations supporting the optimization) by:

 (defun f (&rest x)
   (declare (dynamic-extent x))
   ...)

Note that although the initial value of x is not explicit, the f function is responsible for assembling the list x from the passed arguments, so the f function can be optimized by the compiler to construct a stack-allocated list instead of a heap-allocated list in implementations that support such.

In the following example,

 (let ((x (list 'a1 'b1 'c1))
       (y (cons 'a2 (cons 'b2 (cons 'c2 nil)))))
   (declare (dynamic-extent x y))
   ...)

;; In this example, the implementation is permitted to stack allocate
;; the list that is bound to X.
 (let ((x (list 1 2 3)))
   (declare (dynamic-extent x))
   (print x)
   :done)
(1 2 3)
 :DONE
 
;; In this example, the list to be bound to L can be stack-allocated.
 (defun zap (x y z)
   (do ((l (list x y z) (cdr l)))
       ((null l))
     (declare (dynamic-extent l))
     (prin1 (car l))))   ZAP
 (zap 1 2 3)
123
  NIL

;; Some implementations might open-code LIST-ALL-PACKAGES in a way
;; that permits using stack allocation of the list to be bound to L.
 (do ((l (list-all-packages) (cdr l)))
     ((null l))
   (declare (dynamic-extent l))
   (let ((name (package-name (car l))))
     (when (string-search "COMMON-LISP" name) (print name))))
"COMMON-LISP"
"COMMON-LISP-USER"
  NIL

;; Some implementations might have the ability to stack allocate 
;; rest lists.  A declaration such as the following should be a cue
;; to such implementations that stack-allocation of the rest list
;; would be desirable.
 (defun add (&rest x)
   (declare (dynamic-extent x))
   (apply #'+ x))   ADD
 (add 1 2 3)  6

 (defun zap (n m)
   ;; Computes (RANDOM (+ M 1)) at relative speed of roughly O(N).
   ;; It may be slow, but with a good compiler at least it
   ;; doesn't waste much heap storage.  :-}
   (let ((a (make-array n)))
     (declare (dynamic-extent a))
     (dotimes (i n) 
       (declare (dynamic-extent i))
       (setf (aref a i) (random (+ i 1))))
     (aref a m)))   ZAP
 (< (zap 5 3) 3)  true

The following are in error, since the value of x is used outside of its extent:

 (length (list (let ((x (list 1 2 3)))  ; Invalid
                (declare (dynamic-extent x))
                x)))

 (progn (let ((x (list 1 2 3)))  ; Invalid
          (declare (dynamic-extent x))
          x)
        nil)

It is permissible for an implementation to simply ignore this declaration.