This works automagically if you order your parameters and datasets correctly

• First, set up a primary (report) dataset, then a dataset for each parameter dropdown. Code the WHERE clause in the datasets to make the dependencies correct across parameter variables
• Secondly, order your parameters in the Report | Parameters menu so that the first variable/parameter you want the user to fill in is at the top, and make the second dataset depend on that parameter. Follow this ordering through the parameters; the final parameter(s) should be the one(s) the actual report dataset depends on.
• Repeat for subsequent parameters

This will work if your WHERE clause in the second and subsequent datasets have variables that SSRS knows are populated from earlier parameters.

As an example, I have three datasets from the venerable pubs database.

pubslist is used to populate the @p parameter, and looks like this:

SELECT pub_id, pub_name FROM publishers

titleslist populates the @t parameter, and looks like this:

SELECT title_id, title FROM titles WHERE pub_id = @p

Finally, reportdataset looks like this:

SELECT title, price, ytd_sales FROM titles WHERE title_id = @t

The order of the parameters in the Report | Report Parameters menu is crucial; because the datasets must be executed in the order shown above, and the @t parameter is in a dataset that relies on the @p parameter being set first, we move @p to the top of the list.

Now, SSRS evaluates the dataset needed to fill the dropdown for the first parameter with labels. It relies on a dataset that doesn’t need a parameter, so can be produced immediately.

Then, having got that parameter value, it can populate the second parameter’s dropdown. That in turn results in the report being produced.