can tranformation be applied to dynamica and input text. i have seen a
tranformed input text field. I am sure this can be done.
When I tranform the dynamic text then its text disappears. Scaling does not
disappears the text but does not show any effects too.

Please help.

I managed to animate some dynamic text fields in F8 by making a text clip with
a variable for the input and then place that clip inside another empty
movieclip, thus you are animating the surrounding clip and not the actual text.
With this setup you can use blend modes on your text too.

However I am having issues getting the animation speed at a nice rate.