The Dst index is predicted on the basis of the solar wind for the years 1995--2002 using an update of the previous Temerin and Li <2002> prediction model for Dst. The updated model is based on additional data from the years 2000--2002 corresponding to the maximum of the solar cycle and includes several large magnetic storms. For this 8-year period, the linear correlation between the model and the Dst index is 0.956, the prediction efficiency is 0.914, and the RMS error of the prediction is 6.65 nT (nanoTesla). An analysis of some of the error in the model indicates that at least 25% of the remaining error is due to the effect on the Dst index of a portion of the Sq ionospheric current system and that close to 99% of the variance of Dst index due to magnetospheric currents is predictable. An examination of 10-day intervals around the six largest magnetic storms for which there is good solar wind data shows prediction efficiencies between 0.93 and 0.98 and linear correlation coefficients between 0.96 and 0.99. It is suggested that the annual variation in the Dst index is mainly due to magnetopause and ring currents and the location of the magnetometer stations used to calculate the Dst index. The dependence of the model on the solar wind implies that magnetospheric activity depends on the solar wind approximately in proportion to the square root of the density, square of the velocity, and linearly with the interplanetary magnetic field (IMF). In addition, there is strong dependence on the direction of IMF such that magnetic activity depends approximately on the sixth power of the sine of half the IMF clock angle, where the IMF clock angle is angle of the IMF in the plane perpendicular to the solar wind velocity measured from the northward direction. The model has also strong dependence on the angle between the dipole axis and the solar wind velocity which explains, in part, the seasonal dependence of magnetospheric activity. Overall, the updated model further demonstrates that the large-scale currents that affect the Dst index are well controlled by solar wind variations.