C. Double-meaning pun
In this pun, the word grave has a double meaning. It can refer to either the situation being serious or the hole in which the dead are buried. Both relate to the situation and therefore makes this a double meaning pun.
The men are filled with joy as the bombs fall around them because they want the Germans to be defeated. Wiesel mentions how they've heard the Germans were losing some battles, but this was the first time they had proof. This shows that they "no longer fear death". They have been living with so much death that it is a regular occurrence. Also, a death that is caused as a result of Germany's defeat is better than a death at the hands of the Germans.
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