I want to create a dynamic website. Where does Drupal store its data? Is a MySQL database required to store the data? If Drupal has its own database, does it have any limitation? I am pretty new to Drupal.
Any help would be appreciated.
As of Drupal 7, MySQL, PostgreSQL, and SQLite data types are supported in Drupal core.
Any web hosting company will offer at least one database server.
Basically:
You can find more info about creating your database here:
https://www.drupal.org/docs/7/installing-drupal-7/step-2-create-the-database