UIKit Dynamics is a new framework in iOS 7 that allows developers to add realistic physics-based animation and interactions to their apps. It includes a built-in physics engine that simulates real-world behaviors like gravity, collisions, friction, and more. Developers can define virtual "dynamic items" like views, apply behaviors to them to simulate physics, and use a dynamic animator to coordinate the animation of items over time based on their behaviors. This allows creating complex yet realistic 2D interactions and animations in apps.