Which choice contains an example of dialogue?

Gerry spoke his thoughts out loud, debating over whether to purchase a car or a motorcycle.

Angel and Dylan were such close friends that they seemed to talk to each other with just a look.

Lois thought to herself, l I should probably start heading out to the dentist’s office.

“How did you do that?” Kerry exclaimed when the magician performed his magic trick.

“How did you do that?” Kerry exclaimed when the magician performed his magic trick.