The texture and substructure development during post-dynamic annealing of an austenitic Ni-30%Fe model alloy after complete dynamic recrystallization was investigated using electron back-scattered diffraction (EBSD) and transmission electron microscopy (TEM). A novel mechanism of metadynamic softening is proposed based on the experimental investigation of the grain structure, crystallographic texture and dislocation substructure evolution. The initial softening stage involved rapid growth of the dynamically formed nuclei and migration of the mobile boundaries. The subboundaries within DRX grains progressively disintegrated through dislocation climb and dislocation annihilation, which ultimately led to the formation of dislocation-free grains, while the grain boundary migration gradually became slower. As a result, the DRX texture was largely preserved throughout the annealing process.