Poe's "The Cask of Amontillado" is rich in both verbal irony and dramatic irony, both of which help create a story in which the narrator. Montresor, and his victim, Fortunato, inhabit an ironic universe, and this world creates a constant tension between what a character thinks should happen and what actually happens. Dramatic irony is generally defined as irony in which a character knows less about his or her situation than the reader knows, creating situations that have a different outcome from the character's expectations. It is as if we are watching a train moving relentlessly toward a brick wall, which one or more characters perceive as an open tunnel. A wreck is the only outcome.
Poe sets up the framework of dramatic irony as early as the story's second paragraph, creating a web of false expectations for his victim:
It must be understood that . . . I continued as was my wont, to smile in his [Fortunato's] face, and he did not perceive that my smile was at the thought of his immolation.
Montresor has unknowingly created two elements of dramatic irony here. On one hand, we understand that Fortunato, because of the unidentified "insult," has been fooled into believing that Montresor has not been offended by Fortunato's action. The word immolation, however, means to sacrifice, so the reader is aware of both Montresor's goal and of Fortunato's ignorance of that goal. In addition, Montresor appears unaware that he has unconsciously disclosed a serious character flaw: he appears to the reader as a man consumed by hatred and whose nature is deceitful--he smiles in the face of his friend while he is planning to destroy him.
Both verbal irony and dramatic irony combine when Montresor and Fortunato begin the journey into the catacombs to search for the Amontillado. As Fortunato coughs, Montresor expresses concern and suggests they turn back, to which Fortunato replies:
'Enough," he said; 'the cough is a mere nothing; it will not kill me. I shall not die of a cough.' (Paragraph 36)
As Montresor agrees that his friend will not die of his cold, we recall that Montresor's goal is to immolate, to sacrifice, Fortunato, and the tension between Fortunato's false sense of security, on one hand, and the immolation awaiting for him, on the other hand, increases for the reader.
A short while later, the men discuss Montresor's family's coat-of-arms and motto:
'A human foot d'or, in a field of azure; the foot crushes a serpent rampant whose fangs are embedded in the heel.' (Paragraph 46)
When Fortunato asks for the motto, the dramatic irony signals the reader that Fortunato is not even remotely capable of understanding his situation. Montresor's family motto is based on the concept of retribution, and it is loosely translated as "No one harms me with impunity" (that is, no one harms me without punishment). Fortunato has no clue that he and Montresor are mirrored in the coat of arms--Fortunato, who is richer and more powerful than Montresor, is represented by the foot crushing the snake; Montresor, a man whose family is declining in power and wealth, is the snake biting Fortunato's heel.
Verbal and dramatic irony combine again when Montesor "broke and reached him [Fortunato] a flagon of De Grave," which Fortunato drinks until it's gone. Poe is, of course, playing with words--the wine has a name that can be translated as "of the grave," another instance of verbal irony but, more important, another signal to the reader that Fortunato is an unaware walking dead man.
Perhaps the strongest example of dramatic irony consists of the scene in which Fortunato makes a (presumably) Masonic sign, which Fortunato, who is not a Mason, fails to recognize. When Fortunato says, "You are not of the masons," Montresor pulls a trowel from under his cloak, and Fortunato, in his bubble of ignorance, simply dismisses as a joke. At this point, most readers are screaming "Wake up!" to Fortunato, but the ironic world in which these characters inhabit is not subject to intervention.
Lastly, we must recall that Fortunato has been celebrating Carnival and is in the costume of a jester or fool, the most appropriate costume possible for a man who has been fooled so many times that most readers decide he deserves what is going to happen to him. The dramatic irony here is that, to Fortunato, his costume is merely a costume, but to the reader, his costume symbolizes his nature, which is prideful to a fault and completely incapable of recognizing his danger because he believes Montresor is powerless to harm him.
In sum, then, dramatic irony forms the framework for the story and creates a growing tension between what should happen, according to Fortunato, and what Montresor actually does. This tension often stays with readers even after the horrific ending when Fortunato is walled up at the bottom of the catacombs--in his jester costume, with its jingling bells.