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Take the offer as I’m guessing you would put in a two weeks notice or give them a further out start date. Interview with your dream job and if you get an offer let the first company know you received a better offer and see if they can up the pay or not
Take the good offer and continue interviewing for your dream job. Try to delay your start date to give you some time to finish the interview process.
Once/If you get an offer from your dream job and it's what you actually expect it to be, then you can turn down the company that gave you the good offer.
Don't feel bad about doing this. It's business.
Take the good offer and still interview at your dream job. For all you know the offer on the table for your dream job could be horrible…or maybe they don’t want you. One thing I know for certain though is no one wants a fresh new employee who is full of regret due to a path not taken.
Did you let them know?