We study in detail the dynamics and stability of marginally trapped surfaces during a binary black hole merger. This is the second in a two-part study. The first part studied the basic geometric aspects of the world tubes traced out by the marginal surfaces and the status of the area increase law. Here we continue and study the dynamics of the horizons during the merger, again for the head-on collision of two non-spinning black holes. In particular we follow the spectrum of the stability operator during the course of the merger for all the horizons present in the problem and implement systematic spectrum statistics for its analysis. We also study more physical aspects of the merger, namely the fluxes of energy which cross the horizon and cause the area to change. We construct a natural coordinate system on the horizon and decompose the various fields appearing in the flux, primarily the shear of the outgoing null normal, in spin weighted spherical harmonics. For each of the modes we extract the decay rates as the final black hole approaches equilibrium. The late part of the decay is consistent with the expected quasi-normal mode frequencies, while the early part displays a much steeper fall-off. Similarly, we calculate the decay of the horizon multipole moments, again finding two different regimes. Finally, seeking an explanation for this behavior, motivated by the membrane paradigm interpretation, we attempt to identify the different dynamical timescales of the area increase. This leads to the definition of a ``slowness parameter'' for predicting the onset of transition from a faster to a slower decay.