The transport properties of quantum dots coupled to noncollinear magnetic leads is investigated. It is found that the conductance, and current, of the system in the strongly coupled regime is a nonmonotonic function of the angle between the magnetization directions in the two leads. Because of many-body interactions between electrons in the localized states of the quantum dot, induced by the presence of the conduction electrons in the leads, the positions of the quantum dot states are shifted in a spin-dependent way. Thus, the physics of the quantum dot is dynamically dependent on the angle between the magnetization directions of the two leads, which in combination with spin-flip transitions explains the nonmonotonic behavior of the magnetoresistance. The linear response conductance shows a rich complexity ranging from negative to positive magnetoresistance, depending on the positions of the localized states. The nonmonotonic transport characteristics persists for finite bias voltages.