How to create dynamic cascading dropdown

There are tow ways. But the first step is to create you DB tables for this. i will show you some of my code. let say that i have some dropdown lists:
the CodeL() is to populate the first dropdownlist on page load.

public void CodeL()
      {
          code.Items.Clear();
          code.AppendDataBoundItems = true;

          code.Items.Add(new ListItem("--Select code--"));

          OrdersDataContext db = new OrdersDataContext();
          var selectCodes = (from t in db.codeTs
                             //orderby t.code
                             select t).OrderBy(t => t.code);
          code.DataSource = selectCodes;
          code.DataTextField = "code";
          code.DataValueField = "id";
          code.DataBind();
      }

protected void code_SelectedIndexChanged(object sender, EventArgs e)
      {
          type.Items.Clear();
          type.Items.Add(new ListItem("--Select type--"));

          dem.Items.Clear();
          dem.Items.Add(new ListItem("--Select dimension--"));

          p.Items.Clear();
          p.Items.Add(new ListItem("--Select p--"));

          type.AppendDataBoundItems = true;
          OrdersDataContext db = new OrdersDataContext();
          var selectType = (from t in db.typeTs
                            where (t.codeId == Convert.ToInt32(code.SelectedItem.Value))
                            select t).OrderBy(t => t.type);
          type.DataSource = selectType;
          type.DataTextField = "type";
          type.DataValueField = "id";
          type.DataBind();

          if (type.Items.Count > 2)
          {
              type.Enabled = true;
          }
          else
          {
              type.Enabled = false;
              dem.Enabled = false;
          }
      }

protected void type_SelectedIndexChanged(object sender, EventArgs e)
       {
           dem.Items.Clear();
           dem.Items.Add(new ListItem("--Select dimension--"));

           p.Items.Clear();
           p.Items.Add(new ListItem("--Select p--"));

           dem.AppendDataBoundItems = true;
           OrdersDataContext db = new OrdersDataContext();
           var selectDimension = (from t in db.dimTs
                                  where (t.typeId == Convert.ToInt32(type.SelectedItem.Value))
                                  orderby t.id
                                  select t);
           dem.DataSource = selectDimension;
           dem.DataTextField = "dimension";
           dem.DataValueField = "id";
           dem.DataBind();

           if (dem.Items.Count > 2)
           {
               dem.Enabled = true;
           }
          else
           {
               dem.Enabled = false;
               p.Enabled = false;
           }
       }

etc...

and in aspx file

<asp:dropdownlist id="code" runat="server" autopostback="true" xmlns:asp="#unknown">
                                   BackColor="White" Height="22px"
                                   OnSelectedIndexChanged="code_SelectedIndexChanged" TabIndex="4"
                                   ViewStateMode="Enabled" Width="139px">
                                   <asp:listitem></asp:listitem>
                               </asp:dropdownlist>
                                 
                               <asp:dropdownlist id="type" runat="server" autopostback="True" xmlns:asp="#unknown">
                                   BackColor="White" Enabled="False" Height="22px"
                                   OnSelectedIndexChanged="type_SelectedIndexChanged" TabIndex="5"
                                   ViewStateMode="Enabled" Width="173px">
                                   <asp:listitem></asp:listitem>
                               </asp:dropdownlist>
                                 
                               <asp:dropdownlist id="dem" runat="server" autopostback="True" backcolor="White" xmlns:asp="#unknown">
                                   Enabled="False" Height="22px" onselectedindexchanged="dem_SelectedIndexChanged"
                                   TabIndex="6" ViewStateMode="Enabled" Width="147px">
                                   <asp:listitem></asp:listitem>
                               </asp:dropdownlist>

Second way with webservices

using AjaxControlToolkit;
using System;
using System.Web;
using System.Web.Services;
using System.Web.Services.Protocols;
using System.Collections.Generic;
using System.Collections.Specialized;
using System.Data.SqlClient;
using System.Data;
using System.Data.Linq;
using System.Linq;
using System.Configuration;
using System.Web.Script.Services;

namespace OrderForm2._2
{
    [WebService(Namespace = "http://tempuri.org/")]
    [WebServiceBinding(ConformsTo = WsiProfiles.BasicProfile1_1)]
    // To allow this Web Service to be called from script, using ASP.NET AJAX, uncomment the following line.
    [System.Web.Script.Services.ScriptService]

    public class WebService : System.Web.Services.WebService
    {

        public WebService()
        {

            //Uncomment the following line if using designed components
            //InitializeComponent();
        }

        [WebMethod]
        public CascadingDropDownNameValue[] GetCodes(string knownCategoryValues, string category)
        {
            OrdersDataContext db = new OrdersDataContext();
            IEnumerable<cascadingdropdownnamevalue> vals = null;
            //short targetID = 0;
            vals = (from c in db.codeTs
                   select new CascadingDropDownNameValue
                   {
                       name = c.code,
                       value = c.id.ToString(),
                   }).OrderBy(t => t.name);
            return vals.ToArray<cascadingdropdownnamevalue>();
        }

        [WebMethod]
        public CascadingDropDownNameValue[] GetType(string knownCategoryValues, string category)
        {
            OrdersDataContext db = new OrdersDataContext();
            IEnumerable<cascadingdropdownnamevalue> vals = null;
            StringDictionary kv = CascadingDropDown.ParseKnownCategoryValuesString(knownCategoryValues);
            short code_Id;
            if (!kv.ContainsKey("code") || !short.TryParse(kv["code"], out code_Id))
            {
                return null;
            }
            vals = (from tp in db.typeTs
                   where tp.codeId == code_Id
                   select new CascadingDropDownNameValue
                   {
                       name = tp.type,
                       value = tp.id.ToString(),
                   }).OrderBy(t => t.name);
           return vals.ToArray<cascadingdropdownnamevalue>();
            
        }

        [WebMethod]
        public CascadingDropDownNameValue[] GetDimension(string knownCategoryValues, string category)
        {
            OrdersDataContext db = new OrdersDataContext();
            IEnumerable<cascadingdropdownnamevalue> vals = null;
            StringDictionary kv = CascadingDropDown.ParseKnownCategoryValuesString(knownCategoryValues);
            short type_Id;
            if (!kv.ContainsKey("type") || !short.TryParse(kv["type"], out type_Id))
            {
                return null;
            }
            vals = (from tp in db.dimTs
                   where tp.typeId == type_Id
                   select new CascadingDropDownNameValue
                   {
                       name = tp.dimension,
                       value = tp.id.ToString(),
                   }).OrderBy(t => t.name); 
            return vals.ToArray<cascadingdropdownnamevalue>();
        }

        [WebMethod]
        public CascadingDropDownNameValue[] GetP(string knownCategoryValues, string category)
        {
            OrdersDataContext db = new OrdersDataContext();
            IEnumerable<cascadingdropdownnamevalue> vals = null;
            StringDictionary kv = CascadingDropDown.ParseKnownCategoryValuesString(knownCategoryValues);
            short dim_Id;
            if (!kv.ContainsKey("dimension") || !short.TryParse(kv["dimension"], out dim_Id))
            {
                return null;
            }
            vals = from tp in db.pTs
                   where tp.dimId == dim_Id
                   select new CascadingDropDownNameValue
                   {
                       name = tp.p,
                       value = tp.id.ToString(),
                   } ;
            return vals.ToArray<cascadingdropdownnamevalue>();
        }

        [WebMethod]
        public CascadingDropDownNameValue[] GetQuantity(string knownCategoryValues, string category)
        {
            OrdersDataContext db = new OrdersDataContext();
            IEnumerable<cascadingdropdownnamevalue> vals = null;
            StringDictionary kv = CascadingDropDown.ParseKnownCategoryValuesString(knownCategoryValues);
            short p_Id;
            if (!kv.ContainsKey("p") || !short.TryParse(kv["p"], out p_Id))
            {
                return null;
            }
            vals = from tp in db.Pr_min_quantities
                   where tp.prod_id == p_Id
                   select new CascadingDropDownNameValue
                   {
                       name = tp.min_quant,
                       value = tp.id.ToString(),
                   };
            return vals.ToArray<cascadingdropdownnamevalue>();
        }
    }
}

in aspx code

<ajaxtoolkit:cascadingdropdown id="code_CascadingDropDown" xmlns:ajaxtoolkit="#unknown">
                                  runat="server" TargetControlID="code" LoadingText="Loding ..."
                                  PromptText="Select Code" ServiceMethod="GetCodes" ServicePath="~/WebService.asmx"
                                  Category="Code" UseContextKey="True" Enabled="true">
                              </ajaxtoolkit:cascadingdropdown>

                                
                              <asp:dropdownlist id="type" runat="server" backcolor="White" height="22px" xmlns:asp="#unknown">
                              TabIndex="5" Width="170px" >
                                  <asp:listitem></asp:listitem>
                              </asp:dropdownlist>
                              <ajaxtoolkit:cascadingdropdown id="type_CascadingDropDown" xmlns:ajaxtoolkit="#unknown">
                                  runat="server" TargetControlID="type" Enabled="True"
                                  ParentControlID="code" LoadingText="Loding ..." PromptText="Select Type"
                                  ServiceMethod="GetType" ServicePath="~/WebService.asmx"
                                  Category="type" UseContextKey="True">
                              </ajaxtoolkit:cascadingdropdown>
                                
                              <asp:dropdownlist id="dem" runat="server" backcolor="White" height="22px" xmlns:asp="#unknown">
                                  TabIndex="6" Width="170px">
                                  <asp:listitem></asp:listitem>
                              </asp:dropdownlist>
                              <ajaxtoolkit:cascadingdropdown id="dem_CascadingDropDown" xmlns:ajaxtoolkit="#unknown">
                                  runat="server" TargetControlID="dem" Enabled="True"
                                  ParentControlID="type" LoadingText="Loding ..." PromptText="Select Dimension"
                                  ServiceMethod="GetDimension" ServicePath="~/WebService.asmx"
                                  Category="dimension" UseContextKey="True">
                              </ajaxtoolkit:cascadingdropdown>
                                
                              <asp:dropdownlist id="p" runat="server" backcolor="White" height="22px" xmlns:asp="#unknown">
                              TabIndex="7" Width="130px" style="margin-top: 0px">
                                  <asp:listitem></asp:listitem>
                              </asp:dropdownlist>
                              <ajaxtoolkit:cascadingdropdown id="p_CascadingDropDown" xmlns:ajaxtoolkit="#unknown">
                                  runat="server" TargetControlID="p" Enabled="True"
                                  ParentControlID="dem" LoadingText="Loding ..." PromptText="Select P"
                                  ServiceMethod="GetP" ServicePath="~/WebService.asmx"
                                  Category="p" UseContextKey="True">
                              </ajaxtoolkit:cascadingdropdown>
                                
                              <asp:dropdownlist id="minquant" runat="server" backcolor="White" height="22px" xmlns:asp="#unknown">
                              TabIndex="7" Width="100px" style="margin-top: 0px"><asp:listitem></asp:listitem>
                              </asp:dropdownlist>

As i said at begin you should modified yours tables too.. For example:
Code_Table
id
code
Type_table
id
type
code_id

Dimension_Table
id
dim
type_id
etc...