The understanding of the magnetic properties of real materials demands consideration of both magnetic and structural degrees of freedom as well as the inclusion of possible defects. Using an atomistic model that treats both translational and spin degrees of freedom, we have performed combined molecular dynamics - spin dynamics simulations to study dynamic properties of BCC iron. Atomic interactions are described by an empirical many-body potential while spin interactions are handled by a Heisenberg-like Hamiltonian with a coordinate dependent exchange interaction. By calculating the Fourier transform of spatial and temporal correlation functions, vibrational and magnetic excitations have been studied. Comparison of the results with that of the stand-alone molecular dynamics and spin dynamics simulations reveal that the dynamic interplay between the phonons and magnons leads to a shift in the respective frequency spectra and a decrease in the lifetimes. Moreover, in the presence of lattice vibrations, additional longitudinal magnetic excitations were observed with the same frequencies as the longitudinal phonons. The inclusion of vacancies in the material induces splitting of the characteristic transverse spin-wave excitations, indicating the production of additional excitation modes. By merging two vacancies to form a nearest neighbor pair, we found that these modes become more distinct. Investigation of longitudinal spin-wave excitations revealed interactions between constituent components of the split transverse excitations.