The structure of the decagonal quasicrystalline phase of AlNiCo is studied by molecular (MD) dynamics simulations. An initial structure model, based on X-ray data obtained by Steurer et al., is equilibrated in MD runs with suitable two-body potentials. We investigate whether the decagonal layers are flat and where the short Al-Al distances found in the X-ray data originate. Some atoms move to positions in between the decagonal layers to form icosahedral clusters. The formation of split-positions is observed which explains the short Al-Al separations observed in experiment.