That's slightly different.
Chaos theory (If we call it non-linear dynamics we won't upset all the mathematicians who think "chaos" is a bit pop-science) is to do with certain types of systems that are very sensitive to tiny changes in the starting conditions.
The classic example is the so called butterfly effect where the beat of a butterflys wings in New York might determine whether we have a storm in London.
Imagine the smoke of a cigarette, at first it flows upwards then it becomes "chaotic" billowing this way and that. It is responding to the most minute changes in the atmosphere which cause a billow of smoke in a particular direction.
I suspect the confusion comes from the film "the butterfly" effect which took this analogy that events through time are chaotic and that the smallest things that happen have gigantic changes futher on in time.
It's an old idea, Ray Bradbury wrote a short story "The sound of Thunder" on the idea over 50 years ago but to make "The butterfly effect" work as a film you have to introduce time travel and alternative universes to see the effects.
The "Sound of Thunder" was made into what was apparently a turkey of a film last year. Shame because it's a great short story
http://en.wikipedia.org/wiki/A_Sound_of_Thunde r