I do not think it was a dream because he already woke up from troubled dreams. "One morning, when Gregor Samsa woke from troubled dreams, he found himself transformed in his bed into a horrible vermin." "What’s happened to me?” he thought. It wasn’t a dream."
The answer is C that's the only one that makes sense and the context clues help with the meaning
A conjunction is a word used to connect words or group of words.
A coordinating conjunction joins words or group of words that are similar. They connect words and phrases and also independent clause to form compound sentence.
so the coordinating conjunction in this sentence would be and
