Here is how I view this.

Sex is shown in your dream as something empty. Everybody is dancing sexually and there are class rooms that you can do it in. This is how casual the sex is, you can do it in class. Then you are about to have sex and are scared of people watching. The fat man I believe is God, he is watching like he always is. The fact that you don't mind the girls friend watching, but don't want "God" to watch further shows the lack of morals behind the idea of sex in your story. You know it is wrong and want your privacy away from God. As you leave and find your friends, God leaves your mind and you feel fine. But then later as you leave the lot you approach the death that God gives you. Upon awakening you view the girl you were once about to grind, transformed into a pig. The dog, which I view as the devil is eating her and God is allowing it. It is eating her soul. Next it eats your soul.

I am not religious lol, it's just this is what I thought of.