Hello,
I worked it out from this video:
https://www.youtube.com/watch?v=_uic8R3TF2Q (this video is for the cascade plugin, but most of the parameters are correct. Heres a tutorial:
1) add field Dynamic Select
2) query = construction
3) table = #__categories
4) where = parent_id=89 (where 89 in my case is the top level category ID, and I want all the sub categories of category ID 89 to show in a drop menu)
5) options name = title
6) options value = id
Everything else is left as standard. I havent thoroughly tested this yet, but it works in the form view.