We develop a template-fit method to automatically identify and classify late-type K and M dwarfs in spectra from the Large Sky Area Multi-Object Fiber Spectroscopic Telescope ( LAMOST ) . A search of the commissioning data , acquired in 2009-2010 , yields the identification of 2,612 late-K and M dwarfs . The template fit method also provides spectral classification to half a subtype , classifies the stars along the dwarf-subdwarf ( dM/sdM/esdM/usdM ) metallicity sequence , and provides improved metallicity/gravity information on a finer scale . The automated search and classification is performed using a set of cool star templates assembled from the Sloan Digital Sky Survey spectroscopic database . We show that the stars can be efficiently classified despite shortcomings in the LAMOST commissioning data which include bright sky lines in the red . In particular we find that the absolute and relative strengths of the critical TiO and CaH molecular bands around 7000Ă…are cleanly measured , which provides accurate spectral typing from late-K to mid-M , and makes it possible to estimate metallicity classes in a way that is more efficient and reliable than with the use of spectral indices or spectral-index based parameters such as \zeta _ { TiO / CaH } . Most of the cool dwarfs observed by LAMOST are found to be metal-rich dwarfs ( dM ) . However , we identify 52 metal-poor M subdwarfs ( sdM ) , 5 very metal-poor extreme subdwarfs ( esdM ) and 1 probable ultra metal-poor subdwarf ( usdM ) . We use a calibration of spectral type to absolute magnitude and estimate spectroscopic distances for all the stars ; we also recover proper motions from the SUPERBLINK and PPMXL catalogs . Our analysis of the estimated transverse motions suggests a mean velocity and standard deviation for the UVW components of velocity to be : < U > =-9.8 km/s , \sigma _ { U } =35.6 km/s ; < V > =-22.8 km/s , \sigma _ { V } =30.6 km/s ; < W > =-7.9 km/s , \sigma _ { W } =28.4 km/s . The resulting values are general agreement with previous reported results , which yields confidence in our spectral classification and spectroscopic distance estimates , and illustrates the potential for using LAMOST spectra of K and M dwarfs for investigating the chemo-kinematics of the local Galactic disk and halo .