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This report offers a comprehensive analysis of dynamic rendering and caching within the Next.js App Router, clarifying that "dynamic functions" are a shorthand for specific APIs and configurations that trigger a shift from static to on-demand rendering. It meticulously details how these dynamic triggers impact Next.js's sophisticated, multi-layered caching system, which includes Request Memoization, the Data Cache, the Full Route Cache, and the Router Cache. The document emphasizes that using dynamic features, such as headers() or cookies(), or configurations like export const dynamic = 'force-dynamic', bypasses the Full Route Cache, leading to increased server overhead but ensuring data freshness. Finally, the report outlines practical implications and best practices, advocating for a hybrid rendering model and granular control over caching to optimize performance in Next.js applications.