Answer:
B. Fantasy versus reality
Step-by-step explanation:
In literature, the theme is the message or life lesson that a text conveys about a topic. A literary work may have several themes and they are not directly stated in the story, therefore we, the readers, usually have to think them through.
The topic of the excerpt is fantasy and reality as the two characters are debating over what the windmills are: Sancho sees them as windmills, but Don Quixote sees them as giants. So, one theme that the passage holds about those topics is "Fantasy versus reality."