The paper investigates the dynamic behavior of an Ultra-High Efficiency Gas Turbine Engine (UHEGT) with Stator Internal Combustion. The UHEGT-technology was introduced for the first time to the gas turbine design community at the Turbo Expo 2015. In developing the UHEGT-technology, the combustion process is no longer contained in isolation between the compressor and turbine, rather distributed in the first three HP-turbine stator rows. Noticeable improvement in the engine thermal efficiency and power along with other performance advantages are brought by this technology. In the current paper, a dynamic simulation is performed on the entire gas turbine engine (UHEGT) using the nonlinear dynamic simulation code GETRAN. The simulations are in 2D (space-time) and include the majority of the engine components including rotor shaft, turbine and compressor, fuel injectors, diffuser, pipes, valves, controllers, etc. The thermo-fluid conservation laws are applied to the flow in each component which create a system of nonlinear partial differential equations that is solved numerically. Two different fuel schedules (steep rise and Gaussian) are applied to all injectors and the engine response is studied in each case. The results show that fluctuations in the fuel flow lead to fluctuations in most of the system parameters such as temperatures, power, shaft speed, etc. However, the shapes and amplitudes of the fluctuations are different and there is a time lag in the response profiles relative to the fuel schedules. It is shown that an increase in average fuel flow in the system leads to a small drop in efficiency due to the cycle change from the design point. Moreover, it is seen that the temperatures usually rise fast with increase of fuel flow, but the system tends to cool down with a slower rate as the fuel is reduced.