Electricity and magnetism

The magnetosphere

In a compass, the North Pole is attracted by the geographic North Pole, which in reality acts as a magnetic South Pole, as opposed poles attract each other.

http://www.windows2universe.org/physical_science/magnetism/north_mag_pole_interactive.html

How a dynamo works

Inside the dynamo a permanent magnet is rotated in the middle of some coils of wire. 

The rotating magnet produces a magnetic field and this generates electricity in the coils of wire.