The linear constitutive relations and the failure criteria of composite materials made of thermoviscoelastic solids are presented. The post-failure material behavior is proposed and the dynamic finite element equations are formulated. However, a nonlinear term is kept in the energy equation because it represents the effect of the second law of thermodynamics. A general purpose nonlinear three-dimensional dynamic finite element program COMPASS is upgraded and employed in this work to investigate the interdependence among stress wave propagation, stress concentration, failure progression and temperature elevation in composite materials. The consequence of truthfully incorporating the second law of thermodynamics is clearly observed: it will always cause temperature rise if there exists a dynamic mechanical process.