We report herein a three-component reaction of propargylic alcohols with 2-butynedioates and secondary amines, which furnished functionalized dihydroazepines. In the cases where benzylmethylamine and benzyl-i-propylamine were used as the secondary amine, the reaction afforded 2,5-dihydro-1H-pyrroles and 2,3-dihydro-1H-pyrroles, respectively, as the major product along with the desired dihydroazepines. The reaction mode depends on the electronic and steric effect of the substitutents on the secondary amines used. A tentative mechanism for this cascade process is postulated. The key intermediate is ascribed to 1,3,4-pentatrien-1-amine, which is formed by trapping the in situ generating allenic carbocation with enamine. Because of the reactivity of 1,3,4-pentatrien-1-amine formed, different products were thus formed.