Dramatic irony involves the reader knowing more than the characters do. In Chapter 4, Gene comes to the conclusion that Finny's escapades have all been an attempt to sabotage his grades.
I found it. I found a single sustaining thought. The thought was, You and Phineas are even already. You are even in enmity. You are both coldly driving ahead for yourselves alone. You did hate him for breaking that school swimming record, but so what? He hated you for getting an A in every course but one last term.
This realization comes after the first three chapters in which Finny is presented as being honest, charming, generous with his friends, genuinely kind and compassionate. Finny is not jealous of Gene; he is not trying to sabotage Gene's grades. We the readers can see through Gene's jealousy and misjudgment of Finny, and this creates a form of dramatic irony. Gene projects his own feelings upon Finny, and we know that Gene's epiphany is a false one. Even though the novel is told from Gene's perspective, we know what Gene does not: his jealousy of Finny is destroying what could have been a wonderful friendship.