Laurie’s parents would probably talk about how much trouble Laurie has been in at school, and why he created Charles to tell them about his antics. 

A dialogue is a conversation between two people.  In this case, Laurie’s parents have thought he was a normal boy, despite the trouble he got into at home.  Both are busy with the new baby and their lives, and they did not really notice.

Laurie has told his parents that there was a little boy at school who was causing a lot of trouble. 

“What did he do?” I asked. “Who was it?”
Laurie thought. “It was Charles,” he said. “He was fresh. The teacher spanked him and made him stand in a corner. He was awfully fresh.” 

I imagine the dialogue would go something like this.

“You will never believe what I found out at the PTA Meeting!” Laurie’s mom exclaimed as soon as she came in the door.

“What? Did you meet Charles’s mother?” Her husband asked absentmindedly.

“You could say that.”  She paused.  “I am Charles’s mother.”

This got his attention.  “What?”

“There is no Charles.  Laurie made him up.  Everything he told us happened.  It was Laurie.”

“Wow.  I wonder why he would make up a story like that?” Laurie’s father looked puzzled and amused.

“I guess he had a little more trouble settling into kindergarten than we thought.”

You can imagine how the conversation would go.  Basically, his parents were clueless, but there were plenty of signs.  Laurie was trouble at class, and was happy to come home every day and report on Charles’s behavior.

Make sure you include a lot of details in your dialogue.  I have included a link on proper computation of dialogue.