DECLARE @word sysname

EXEC sp_executesql
    N'SELECT TOP 1 @DynamicWord = [name] FROM sysobjects'
    ,N'@DynamicWord sysname OUTPUT'
    ,@word OUTPUT

SELECT @word

DECLARE @word sysname

EXEC sp_executesql
  N'SELECT TOP 1 @DynamicWord = [name] FROM sysobjects' --dynamic sql query to execute
    ,N'@DynamicWord sysname OUTPUT' --parameter definitions
    ,@DynamicWord=@word OUTPUT --assigning the caller procs local variable to the dynamic parameter

SELECT @word

CREATE TABLE #TempLocal (MyName sysname);

EXEC sp_executesql
  N'INSERT INTO #TempLocal (MyName) SELECT [name] FROM sysobjects'; --dynamic sql query to execute

SELECT MyName FROM #TempLocal;
DROP TABLE #TempLocal;