The amplification and nonlinear broadening dynamics of dissipative soliton are studied. A compact all-fiber highly coherent supercontinuum source is successfully developed. The seed laser in the experiment is a dissipative all-fiber mode-locked laser working in all-normal dispersion region. The nonlinear polarization rotation mode-locking technology is applied. The output pulse width of the dissipative soliton is 5.18 ps with a repetition rate of 24 MHz. The seed laser pulse is amplified with a 15-m double-clad ytterbium-doped fiber, then is coupled into a 10 m photonic crystal fiber. The supercontinuum generation achieves more than one octave of bandwidth (550～1750 nm) at 700 mW average power. The amplification process of dissipative soliton and the mechanism of supercontinuum generation in anomalous dispersion region of photonic crystal fiber are systematically studied.