The animal imagery seems to serve many different functions. The dream bird and its shit tend to establish the tone of the work in the first paragraph and possibly foreshadow the oblivious Santiago Nasar figuratively awakening and finding himself the object of the Vicario twins' knives.
The slaughtered rabbits being fed to the dogs echo Santiago's autopsy in which the dogs are shot when they try to eat Santiago's intestines. Again, the rabbits may be an example of foreshadowing as Santiago is repulsed when he sees what Victoria Guzman is doing to the rabbits, almost as if he has a premonition of what is in store for him. Metaphorically, Victoria Guzman may be guilty of slaughtering Santiago as well. Obviously upset with him for groping her daughter, Victoria has reason not to warn him of the Vicario twins' plot to kill him.
In this way, the animals seem to establish the violent setting of blood and slaughter that culminate in Santiago's death. He is viciously hacked by the same knives that the twins use to slaughter their pigs. They also may serve to create some pathos for Santiago when we see the similiarities between the fate of his corpse and that of the rabbits.