Dramatic irony occurs when the audience knows something the characters don't know. For example, in Romeo and Juliet, Romeo thinks Juliet is dead, when in fact she is merely sleeping because she drank the potion. However, thinking she is no longer alive, Romeo kills himself. The audience knows she is alive, but he doesn't, which makes this dramatic irony.
Dramatic Irony is a situation in a drama wherein the characters in the play cannot grasp what's happening, but the audience can already understand what is going to happen and understood what has happened. So the answer is, Audience knows something the characters don't know.
