If the prosecutor is offering to drop the misdemeanor charges to a reduced plea to the violation, then it sounds like he is offering to "plea bargain" with you. This means that there should be a specific punishment they expect of you in exchange for the reducing the charges. You should speak with your current lawyer to find out what that punishment is. If you accept the offer and fail to do the punishment, or get in new trouble or violate any orders of protection, you face up to 15 days in jail.
I am unfamiliar with the Dream ACT so I cannot comment on that.
This response is for general information purposes only and does not constitute the formation of an attorney-client relationship. Past results do not guarantee future results.