Scared and confused after killing Curley's wife, Lennie starts experiencing delusions. As he waits for George, he falls into a deep sleep, where he has a very strange dream. In the dream, his Aunt Clara appears, scolding Lennie for doing bad things and always getting George into trouble of one kind or another. Though Lennie didn't actually mean to kill Curley's wife, he knows that he's done something terribly wrong, and the appearance of Aunt Clara in his dream is an unwelcome reminder of this.
Lennie also dreams about a human-sized rabbit telling him off. Lennie may be mentally challenged, but in his very deepest subconscious, he knows that killing Curley's wife has pretty much wrecked his hopes and dreams of working his own ranch with George and taking care of the rabbits. And that's what this particular dream tells him.