A dramatic situation in poetry is the underlying plot line that is created to place the characters in conflict with themselves or others. It is a literary tool that is used to force the audience to become emotionally invested in the poem.
The poem's setting, characters and action all contribute to establishing the dramatic situation. The dramatic situation is characteristically unstable in that the audience is aware that the plot of the poem will not stay constant. In general, there is a good or a bad outcome for a dramatic situation. If the outcome is bad, then the poem is described as a tragedy.