Dynamic channel assignment, adapting both to traffic variations as well as to changing mobile locations, is investigated. Several ad hoc schemes of this type have been described in the literature and found to yield interesting performance improvements. However, very little is known about the performance of the optimum assignment schemes. Both upper and lower bounds for the performance of optimum algorithms within the class of reuse-type dynamic channel assignment (DCA) for a simple propagation model are established. The authors focus on the asymptotic performance, i.e., the performance in systems with large traffic loads. As a performance measure, the probability of assignment failure (intracell handoff failure) is used. Results show that the capacity one may expect to achieve with these algorithms in the asymptotic case is just above twice the capacity of a fixed channel allocation scheme.< >