Freud's dynamic model of the mind consists of three core components: the id, ego, and superego. The id is driven by unconscious desires and instincts, operating on the pleasure principle. The ego is the rational part that mediates between the id's desires and reality, adhering to the reality principle. The superego is the moral aspect, incorporating societal rules and values. Freud believed that the interplay of these components creates psychological conflict, which can lead to anxiety and defense mechanisms.