Finite temperature ab initio molecular dynamics (AIMD), in which forces are obtained from "on-the-fly" electronic structure calculations, is a widely used technique for studying structural and dynamical properties of chemically active systems. Recently, we introduced an AIMD scheme based on discrete variable representation (DVR) basis sets, which was shown to have improved convergence properties over the conventional plane wave (PW) basis set [Liu,Y.; et al. Ph)u. Rev. B 2003, 68, 125110]. In the present work, the numerical algorithms for the DVR based AIMD scheme (DVR/AIMD) are provided in detail, and the latest developments of the approach are presented. The accuracy and stability of the current implementation of the DVR/AIMD scheme are tested by performing a simulation of liquid water at ambient conditions. The structural information obtained from the present work is in good agreement with the result of recent AIMD simulations with a PW basis set (PW/AIMD). Advantages of using the DVR/AIMD scheme over the PW/AIMD method are discussed. In particular, it is shown that a DVR/AIMD simulation of liquid water in the complete basis set limit is possible with a relatively small number of grid points.