excuse the crappy example image, but say i wanted to attach a chain to my avatar that went from one arm to the other (like the green line in this image) attaching and making the actual object is simple enough to do, but how would I set up the dynamic bones on the chain so it moves naturally? (sort of like a jump rope style of movement with the swinging in the center)

I've only ever done dynamic bones on things like necklaces, clothing, ears, etc. Basically anything that just flows in one direction and has a starting bone and an endbone, but with this there's no real end, it's a start/finish on both sides of the chain with the center having the most force