Performance forecasting of multi-fractured horizontal wells (MFHWs) completed in tight/shale oil or gas reservoirs is of great significance in the development of unconventional resources. Dynamic drainage area (DDA) concept has emerged as a production forecasting methodology for unconventional reservoirs. This paper investigated the DDA method and derived correct expressions of distance of investigation (DOI) for both constant production rate and constant bottom-hole pressure cases by integrating material balance and deliverability equation within the range of DOI. The modified DDA method with correct DOI coefficients provided in this paper permits direct calculation of dynamic performance at arbitrary time steps before the end of transient linear flow. At the same time smooth production forecasting of MFHWs from transient linear to boundary-dominated flow is realized without modification by extra coefficient. Hybrid models such as DDA plus dual-exponential and DDA plus hyperbolic are presented, which can be applied quickly and easily to MFHWs in unconventional reservoirs as alternatives to complex numerical simulation. Meanwhile, average pressure in the range of DDA can be readily obtained with correct DOI coefficients, avoiding complex iterative calculations. The reliability and practicability of this solution have been demonstrated by synthetic and field cases in this work.