Cool, thanks for that, a very cool example of dynamic paint.
I actually think that what I was trying to achieve is slightly different than this video. I could be wrong, but it looks to me like the laser in that video is just discoloring the ground, not displacing it.
I wanted to actually “carve out” the logo using a displacement modifier.
My problem was that I couldn’t get dynamic paint to affect a texture used for a displacement modifier in my animation. I was making my brush affect the weight of the texture, but I couldn’t get that to dynamically affect the displacement modifier.
I finally decided to abandon dynamic paint and resort to using an image sequence as the texture for my displacement modifier, but that didn’t work either.
It seems like when you kick off an animation, it only uses the image at the current frame in the image sequence for the displacement modifier. If I jumped to any frame and F12 rendered it, it looked fine. Seems like a bug to me. To get around it, I wrote a simple python script that just rendered each frame (as if it were an F12 render) and saved the result. This worked and it gave the result that I wanted!