Final answer:
Dunstan holds power over Godfrey by knowing about his secret marriage and child, using it to manipulate and blackmail him, which forces Godfrey to comply with Dunstan's demands. The correct option is C.
Step-by-step explanation:
Dunstan had a hold over Godfrey because Dunstan knew about Godfrey's secret marriage and child, which he used for manipulation and blackmail. This is depicted in George Eliot's novel 'Silas Marner', where Dunstan Cass uses the knowledge of Godfrey's clandestine marriage to Molly Farren and their child to exert control over him. This secret would ruin Godfrey's social standing and his prospects of marrying his love interest, Nancy Lammeter, were it to become public knowledge.
Dunstan blackmails Godfrey, demanding money and other favors under the threat of exposing the secret. Godfrey, living in fear of the scandal and the disappointment of his father, reluctantly complies with Dunstan's demands, illustrating the dynamics of power and vulnerability within personal relationships of that time.
Hence, Option C is correct.