Which feature of Windows allows users to dynamically encrypt selected files and folders?

The correct feature that allows users to dynamically encrypt selected files and folders in Windows is the Encrypting File System (EFS). EFS is designed to provide file-level encryption, enabling users to encrypt individual files or folders rather than the entire drive. This feature integrates with the NTFS file system and helps protect sensitive data by automatically encrypting it when the user saves it.

Unlike BitLocker, which encrypts whole drives (providing whole disk encryption for data protection), EFS targets specific files and folders, making it highly flexible for users who need granular control over their encryption. It's especially useful for protecting individual pieces of data from unauthorized access while allowing the rest of the filing system to remain accessible.

The other options, such as DESX, do not pertain specifically to Windows encryption utilities in the context of file and folder encryption. Therefore, EFS remains the pertinent and correct answer for this question.