Basically if you have 2 or more custom drop downs, the first drown down has 2 options, if you select an option in the first drop down, you should see different results in the second drop down depending on your selection in drop down 1.
Just now you can do this by adding a new drop down for each option in the first drop down. But if the first drop down has 100-1000 options then you would require a huge number of drop downs to be added via the API,
To fix this, if you could have a subset feature for the drop down options and basically on display logic you can switch between the subsets of the options.
Ross