Hi Abram,
Not sure if there's an easier way but this is what worked for me, so hopefully will work for you too.
In the 'Select Dynamic' field, you can set the 'Query' drop down to 'Free' and add your own SQL. Paste this into the 'SQL Query' box:
SELECT CONCAT( REPEAT('-', (category.level)-1), category.title) AS text, category.id AS value
FROM #__categories AS category
LEFT JOIN #__categories AS parent
ON category.lft BETWEEN parent.lft AND parent.rgt
WHERE parent.id = 25 ORDER BY category.lft
Then set the storage as 'catid'.
You can edit the SQL to remove the hypens if you don't need them, they're just there for formatting the dropdown.
Hope that helps,
MRBWT