The dominoes in the story are incredibly symbolic. When the Nazis come looking for Rudy, he is playing dominoes and setting up a tower of destruction. There are many things at play, first of which is the dominoes representing the destruction of people under the thumb of the Nazis. As the book says that the Nazis, and Rudy himself perhaps, would observe the destruction and smile, it is intimating the cruelty of the Nazi regime.
Another interesting point is the foreshadowing of the coming end to the war. Soon, the entire Nazi machine will collapse, which makes Rudy’s parents’ attempts to get him into a special Nazi school all the more futile.
Finally, it is noted that he makes three groups that converge and collapse upon a central tower. This is metaphorical, most likely of the Allied nations—Britain, the United States, and the Soviet Union. They will converge on Berlin and lead to the end of Nazism. In that regard, it is possible that the foreshadowing is saying that Rudy, since he has not been yet indoctrinated by the Nazis, will smile as he witnesses the destruction of the Nazi party by the Allied forces, being overjoyed by the freedom.