You can overwrite the files if prompted to do. No custom configuration files will be overwritten, as most are stored in the database.
Check the folder
If you find a file named update_[VERSION].sql (where as [VERSION] is a placeholder for the version number without the dots, like update_101.sql is database update file for version 1.0.1) execute the file in your dynaBOARD database (like in phpMyAdmin or on the console).
Please make sure to use the correct version of the sql file, else you risk problems with your database or your application.
Proceed with update wizard
and follow the instructions, replacing "yourdomain" with the domain under which your dynaBOARD Server installation is running.
Remove the file setup/index.php and log into dynaBOARD.