A dynamic lookup cache is updated whenever a lookup is done to it. The Integration Service will alter the cache if necessary when it is processing a Lookup transformation that has dynamic caching enabled.
If the lookup fails, i.e. the incoming port values were not found in the cache, then they are added to it at that point (depending on how the transformation is configured), and the Integration Service continues processing downstream transformations.
This means that downstream transformations in the mapping as well as any further rows that are processed through the mapping should be able to "see" the new cache record when the Lookup has been processed for the current row.