This paper discusses the development of a fully-nonlinear flight dynamics model of a hover-capable Air-Launched Uncrewed Aerial System (ALUAS) in order to (1) understand the dynamics, controllability, and air loads of these type of aircraft while performing complicated maneuvers, (2) formulate design principles to feed back into the development of the realized physical aircraft, and (3) provide a high-fidelity dynamic framework to develop novel control laws. The flight dynamics model is developed using a software called Rotorcraft Comprehensive Analysis System (RCAS), where each component of the vehicle was modeled with varying fidelity. Wind tunnel tests were conducted on fullscale models to measure the forces and moments on the propeller, the isolated fuselage, and the full aircraft. Wind tunnel tests were also conducted to measure the forces and moments on the full aircraft for different wing folding angles. The thrust and torque of the propeller as well as the lift predictions for the aircraft correlated well with the test data while the drag and pitching moment were under-predicted. The qualitative trend of the forces and moments on the aircraft during wing unfolding were also correctly predicted. The RCAS model, once corrected with the test data, was used to simulate nominal maneuvers including edgewise flight, hover-to-cruise transition, cruise-to-hover transition, ground-launch, air-launch from a moving helicopter, and air-launch with asymmetric wing unfolding. These simulations demonstrated the capability of the vehicle to perform complicated maneuvers to meet various mission objectives in challenging environments.