You need to assign an action to your character model that contains the code for the dynamic light. The manual has some info under "entity.lightrange".

An example of a simple light action would be:
Code:

---

action dyn_light
{
	//// dynamic light parameters //// 
	my.lightrange = 500; // turns off light if set to 0
	vec_set(my.blue,vector(255,255,255)); // white light, decrease all three if too bright
}

---

cheers,
tindust