  Given a static reference string $R$ and a source string $S$, a relative
compression of $S$ with respect to $R$ is an encoding of $S$ as a sequence of
references to substrings of $R$. Relative compression schemes are a classic
model of compression and have recently proved very successful for compressing
highly-repetitive massive data sets such as genomes and web-data. We initiate
the study of relative compression in a dynamic setting where the compressed
source string $S$ is subject to edit operations. The goal is to maintain the
compressed representation compactly, while supporting edits and allowing
efficient random access to the (uncompressed) source string. We present new
data structures that achieve optimal time for updates and queries while using
space linear in the size of the optimal relative compression, for nearly all
combinations of parameters. We also present solutions for restricted and
extended sets of updates. To achieve these results, we revisit the dynamic
partial sums problem and the substring concatenation problem. We present new
optimal or near optimal bounds for these problems. Plugging in our new results
we also immediately obtain new bounds for the string indexing for patterns with
wildcards problem and the dynamic text and static pattern matching problem.
