© 2014, Springer Science+Business Media New York. In this paper, we investigate the dynamics of quantum discord and entanglement between the coin states of two quantum walkers on cycle graphs of various size in discrete time. For a few special cycle sizes, we obtained analytical solutions showing the origin of perfect periodic recurrence of quantum discord and entanglement. We found that the time evolution of such quantum correlations becomes increasingly complex when we introduce local interactions between the two walkers by applying an additional phase to the coin operator when they are at the same node. The effects of the interaction strength on the dynamics of the quantum discord and entanglement are studied in detail.