Why is the end of chapter three significant.

Lennie's crushing of Curley's hand - an unusual form of fighting, to say the least - is highly significant. We've already seen how Curley's hand is associated with his sexuality - he keeps one hand soft for his wife. Thus the injury he sustains resonates with his (already uneasy) sense of sexual prowess. Lennie has, metaphorically at least, crushed more than the man's hand - he has also crushed his very manhood. Lennie cannot understand the significance of this gesture, but the others - or, at least, the reader - can. Lennie has unwittingly unmanned his rival and indirectly revealed his superior physical (and sexual) prowess. Thus Steinbeck lays the foundation for a conflict that directly links Lennie, Curley, and Curley's sexual object, his wife. As to the dream, we know this event is a harbinger to even worse events and the eventual unraveling of the farm dream.