Arafat returned figures of three for 21 from four overs to reach 99 wickets as the visitors were bowled out for just 121 in 19.2 overs after electing to bat. Left-arm spinner Gary Keedy led the way with four for 25 as Gareth Breese top-scored with 33 off 18 balls for the Dynamos, who had only four batsmen reach double figures.
Steven Croft then smashed a destructive unbeaten 65 off 44 balls as the hosts moved joint top of the North Group with seven points from five matches alongside Nottinghamshire and Yorkshire.
Croft, who hit four fours and as many sixes, shared 103 in 11.4 overs for the second wicket with Tom Smith (40 off 31 balls) as the win was secured with six overs to spare.
Arafat, who is playing for his fourth county having had spells with Kent, Surrey and Sussex, passed the tally of 97 FLt20 wickets held by his countryman Azhar Mahmood with his performance tonight.
He had Herschelle Gibbs caught at mid-on in the third over before returning to get Gordon Muchall caught at long-on and Breese caught at mid-off in the 17th.
Durham's performance was summed up by Ben Stokes treading on his own stumps as he looked for a single to mid-wicket off Glen Chapple before Phil Mustard was run out following a mix-up with Johann Myburgh, both of whom made 22.
Keedy bowled Dale Benkenstein and had Myburgh caught at long-on in his first spell before bowling Liam Plunkett and getting Mitchell Claydon caught and bowled with successive deliveries in the 18th, leaving the score at 113 for nine.
Lancashire lost Stephen Moore in the second over of their reply to Claydon, giving the Dynamos a ray of light. But Croft quickly extinguished any hopes of a third Durham win as he helped take 23 off Graham Onions in the fifth over, hitting him for two sixes over square-leg and long-leg and two fours either side.
Seventeen also came off Scott Borthwick's first over, the ninth of the innings, as Smith hit him for a straight six into the new player and media facility at the Statham End of the ground. Smith fell to Borthwick as he tried to finish the match with a six before Karl Brown hit the winning runs.