George tries to steal Lennie's mouse and throw it away from him, while Lennie refuses to give George the mouse. George always tries to take away any chance Lennie has of doing something wrong or harmful, given the fact that Lennie can and probably will break anything he touches.
Candy is distraught because Carlson is going out to shoot his old dog. George and Lennie are playing cards whilst trying to ignore the situation. This scene is significant, because it's foreshadowing the murder of Lennie. The other men don't understeand why Candy is so upset, just like they won't understand George's pain later in the story.
Candy and George had just discovered Curley's wife found dead in the barn. George didn't want to believe it, but he knew right away that Lennie had done it. The two men were thrown into a panic, knowing that Lennie had just ruined their dream. George admits that deep down, he always knew that it wouldn't work out. Crooks and George share that trait, of knowing their dreams may likely never come true.
George and Lennie are talking about their future ranch that they ahd once planned to hold, although George is secretly preparing to shoot Lennie in the back of the head. George is distraught that he would have to murder Lennie, although he knew that the others would make it more painful if they got to him first. George also felt a bit of resentment towards Lennie at this moment.