A method for specifying reactive systems using Dynamic State Machines (DSMs) is disclosed. The method extends statecharts in three areas. One is the integration of a group of related finite state machines (FSMs) into a single and powerful entity supporting multiple repeatable concurrent communication sessions. The second is the support for composite transitions to model various parallel event patterns or nested event patterns, which occur in the real world, and to significantly improve the readability of state diagrams. The third is the addition of a parallel-OR composite state to support the OR-termination semantics of a parallel composite state.