This paper systematically presents a novel, interactive solid modeling framework, Haptics-based Dynamic Implicit Solid Modeling, which is founded upon volumetric implicit functions and powerful physics-based modeling. In particular, we augment our modeling framework with a haptic mechanism in order to take advantage of additional realism associated with a 3D haptic interface. Our dynamic implicit solids are semi-algebraic sets of volumetric implicit functions and are governed by the principles of dynamics, hence responding to sculpting forces in a natural and predictable manner. In order to directly manipulate existing volumetric data sets as well as point clouds, we develop a hierarchical fitting algorithm to reconstruct and represent discrete data sets using our continuous implicit functions, which permit users to further design and edit those existing 3D models in real-time using a large variety of haptic and geometric toolkits, and visualize their interactive deformation at arbitrary resolution. The additional geometric and physical constraints afford more sophisticated control of the dynamic implicit solids. The versatility of our dynamic implicit modeling enables the user to easily modify both the geometry and the topology of modeled objects, while the inherent physical properties can offer an intuitive haptic interface for direct manipulation with force feedback.