For single-source helical Computed Tomography (CT), both Filtered-Back Projection (FBP) and statistical iterative reconstruction have been investigated. However, for dual-source CT with flying focal spot (DS-FFS CT), a statistical iterative reconstruction that accurately models the scanner geometry and acquisition physics remains unknown to researchers. Therefore, our purpose is to present a novel physics-based iterative reconstruction method for DS-FFS CT and assess its image quality. Methods: Our algorithm uses precise physics models to reconstruct from the native cone-beam geometry and interleaved dual-source helical trajectory of a DS-FFS CT. To do so, we construct a noise physics model to represent data acquisition noise and a prior image model to represent image noise and texture. In addition, we design forward system models to compute the locations of deflected focal spots, the dimension, and sensitivity of voxels and detector units, as well as the length of intersection between x-rays and voxels. The forward system models further represent the coordinated movement between the dual sources by computing their x-ray coverage gaps and overlaps at an arbitrary helical pitch. With the above models, we reconstruct images by an advanced Consensus Equilibrium (CE) numerical method to compute the maximum a posteriori estimate to a joint optimization problem that simultaneously fits all models. Results: We compared our reconstruction with Siemens ADMIRE, which is the clinical standard hybrid iterative reconstruction (IR) method for DS-FFS CT, in terms of spatial resolution, noise profile, and image artifacts through both phantoms and clinical scan datasets. Experiments show that our reconstruction has a higher spatial resolution, with a Task-Based Modulation Transfer Function (MTF task ) consistently higher than the clinical standard hybrid IR. In addition, our reconstruction shows a reduced magnitude of image undersampling artifacts than the clinical standard. Conclusions: By modeling a precise geometry and avoiding data rebinning or interpolation, our physics-based reconstruction achieves a higher spatial resolution and fewer image artifacts with smaller magnitude than the clinical standard hybrid IR.