We present a spectroscopic study and dynamical analysis of \sim 2600 M7 dwarfs .
We confirm our previous finding that the fraction of magnetically active stars decreases with vertical distance from the Galactic plane .
We also show that the mean luminosity of the H \alpha emission has a small but statistically significant decrease with distance .
Using space motions for \sim 1300 stars and a simple one-dimensional dynamical simulation , we demonstrate that the drop in the activity fraction of M7 dwarfs can be explained by thin disk dynamical heating and a rapid decrease of magnetic activity at a mean stellar age of \sim 6-7 Gyr .