On your desktop, right click on My Computer and click manage, then go to Storage and then Disk Management.
Your hard drives will be labled as Disk 0, Disk 1 and so on if you have multiple drives.
Your System disk( Usually with drive letter C will be Disk 0.
Right click over where it says Disk 0 or Disk 1 or whatever the drive name is.
Click Convert to Dynamic, it will then do a quick test to see if it can convert and it it says Will Convert then you can convert it.
All the Basic drive volumes show as Blue, the Dynamic will show as Gold.
*edit* Forgot to mention that you will need to reboot twice for each dirve you convert, once so it can unmount the volume and convert it and then again after you reboot as it will detect your drives as new hardware.
Click Yes when it says it is going to unmount and reboot.