While the statistical mechanical description of DNA has a long tradition, renewed interest in DNA melting from a physics perspective is nourished by measurements of the fluctuation dynamics of local denaturation bubbles by single molecule spectroscopy. The dynamical opening of DNA bubbles (DNA breathing) is supposedly crucial for biological functioning during, for instance, transcription initiation and DNA's interaction with selectively single-stranded DNA binding proteins. Motivated by this, we consider the bubble breathing dynamics in a heteropolymer DNA based on a (2+1)-variable master equation and complementary stochastic Gillespie simulations, providing the bubble size and the position of the bubble along the sequence as a function of time. We utilize new experimental data that independently obtain stacking and hydrogen bonding contributions to DNA stability. We calculate the spectrum of relaxation times and the experimentally measurable autocorrelation function of a fluorophore-quencher tagged basepair, and demonstrate good agreement with fluorescence correlation experiments. A significant dependence of opening probability and waiting time between bubble events on the local DNA sequence is revealed and quantified for a promoter sequence of the T7 phage. The strong dependence on sequence, temperature and salt concentration for the breathing dynamics of DNA found here points at a good potential for nanosensing applications by utilizing short fluorophore-quencher dressed DNA constructs.