The statement that best explains how Orwell uses dramatic irony in this passage to reveal the theme that knowledge can be lost between generations is:
The reader understands the history of the rebellion, but the new horses do not.
This choice highlights the disparity between the reader’s awareness of the historical context (the Rebellion and the principles of Animalism) and the lack of understanding among the new horses, illustrating how knowledge and critical awareness can be diminished or lost over time, particularly between generations of animals on the farm.