Change direct speech into indirect speech.

  "I  dreamt of my grandmother last night," he said.

Option A is correct because the pronoun “I" has been changed to” He”. The reporting verb in direct speech is in the present tense. When converting to indirect speech, it should be past tense. Therefore, last night is the night before. Option B is wrong because the pronoun should be he, not she. Option C is wrong because, in the given statement, the night before is changed to the next day, which is wrong.