Dweezil Dynaflange settings:
Use two different amps and cabs (Dweezil used Marshall JTM and Fender Twin IIRC in his example)
Use own routing for each amp and pan the cabs hard left and right
Balance the volume of the amps until you feel it's it sounds right
Put a mono tape delay in front of the Fender (or Marshall if you prefer)
Feedback to 0, mix to 100%. Leave other settings default from now.
Attach an envelope follower to delay time. Set min value to 0ms and max about 20-80ms depending how wide you want the sound to be. Dweezil settled for 52ms or 57ms IIRC, which was quite wide. There's no right or wrong in here.
Play with the envelope controller to fine tune the effect until you find the sound pleasing (threshold, attack, release). This depends on your guitar pickup output, so there's no universal setting here.
That's basically it.
Optional:
Play with the delay modulation settings to have more chorus-y kind of sound or go nuts with the sound.
Put a phaser, flanger or an octave down/up effect on the amp that doesn't have the delay.
Use wah and fuzz to really make the effect audible.
Extra tips:
Attach a controller to Motor Speed to set how fast the sound ramps up. Low values = fast, High values = slow. Dweezil didn't show this in the video, but I believe this is a little trick he's used.