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As a result of bit-rock interaction, downhole weight-on-bit, downhole torque, instantaneous downhole rotational speed and bit motion (acceleration and rate of penetration) are directly affected by the formations being drilled. Since these measurements react differently to different lithologies, and assuming that drilling problems do not effect these measurements, any changes in the measurements in some way will reflect changes in the properties of the lithology. If, based on these measurements, the lithology is assumed to have certain properties, then it is possible to derive models for the interaction between bit, formation and drillstring. With these models it is possible to simulate the dynamic behavior of the system including phenomena like stick-slip. Rate of penetration has long been used as a lithology indicator, and drilling models have been developed using surface measured drilling parameters to infer changes in lithology. With the advent of MWD measurements, significant improvements were made in the mathematical models by involving downhole torque. The model derived parameters were shown to be related to rock strength (drilling and shear strength) and proved to be good indicators of formation changes. Similar expressions in the form of simple bit models can be used in combination with a finite element model of the drillstring to simulate the dynamic behavior of the complete system. A significant improvement in this analysis can be affected by introducing measurements from the dynamics tool, such as instantaneous torque, weight and rotation rate, as well as the bit acceleration. These measurements provide not only static but also dynamic data which can be used to validate simulations and the underlying models. The present analysis explores the use of the dynamic measurements and the application of some drilling models in analyzing formation changes while drilling, and the use of these data and models in simulating drilling dynamics.