In this paper, we present a dynamic clustering algorithm that efficiently deals with data streams and achieves several important properties which are not generally found together in the same algorithm. The dynamic clustering algorithm operates online in two different time-scale stages, a fast distance-based stage that generates micro-clusters and a density-based stage that groups the micro-clusters according to their density and generates the final clusters. The algorithm achieves novelty detection and concept drift thanks to a forgetting function that allows micro-clusters and final clusters to appear, drift, merge, split or disappear. This algorithm has been designed to be able to detect complex patterns even in multi-density distributions and making no assumption of cluster convexity. The performance of the dynamic clustering algorithm is assessed theoretically through complexity analysis and empirically through a set of experiments.