Ultra-precision machine tool is the most important physical tool to machining the workpiece with the frequency domain error requirement, in the design process of which the dynamic accuracy design (DAD) is indispensable and the related research is rarely available. In light of above reasons, a DAD method of ultra-precision machine tool is proposed in this paper, which is based on the frequency domain error allocation. The basic procedure and enabling knowledge of the DAD method is introduced. The application case of DAD method in the ultra-precision flycutting machine tool for KDP crystal machining is described to show the procedure detailedly. In this case, the KDP workpiece surface has the requirements in four different spatial frequency bands, and the emphasis for this study is put on the middle-frequency band with the PSD specifications. The results of the application case basically show the feasibility of the proposed DAD method. The DAD method of ultra-precision machine tool can effectively minimize the technical risk and improve the machining reliability of the designed machine tool. This paper will play an important role in the design and manufacture of new ultra-precision machine tool.