Fiction writers have long wrestled with speech, language, and dialogue. From finding the exact word for the exact moment to controlling how the reader reads through punctuation, from dialogue where a memorable character's voice fills your head with their inflection and tone and exclamations to a simple declaratory phrase, like this one from The Lottery: "...and then they were upon her." You're horrified at the action, but it's the phrase which lives to haunt.
Distinguishing between the "narrator" of the story and the characters' dialogue generally means there are a number of voices at work simultaneously. Never forget, however, that there's always an author lurking in the background who is responsible. Our ability to "hear" characters, in their own language (diction), is a very difficult process for a writer. There must be no false cues, or if the narrator is telling what was said, the plausibility of what they recount of it is paramount.
Here we must address the concept of the narrator's perspective, or "point of view." Understanding the point of view in a story is generally central to our comprehension of it. If one of the primary characters, or the main character is speaking, like Sister in the story "Why I Live at the P.O.," we call that the first-person point of view. Likely, you will see the pronoun "I" used quite frequently. If a story is told from a "third person" point of view, that means the narrator is set apart from the story, perhaps a secondary character, or someone who remains unnamed, but it's through their eyes, and observations that we "watch/hear" what is taking place. The third-person point of view can be two types: limited or omniscient. If the narrator merely "observes and reports," without also discussing another character's reasoning, or motives, then their point of view is "limited." If the narrator seems "to know everything about everybody" and knows details a secondary character or even the reader couldn't possibly know, then we call them "omniscient."
In particular, several stories you'll encounter deal specifically with language, or diction, in a number of very creative ways. Look at the straightforward southern dialect (regional language) of Sister in "Why I Live at the P.O.," but also notice that it is Sister who tells the reader all that Stella-Rondo supposedly says, which she maintains is "true" (although it may be embellished, or hyperbole like tall tales). And, take note of the title of the story "Everyday Use," which seems to underpin Dee Wangero's need for the now-fashionable historic "artifacts" she wants to preserve and display as "Art" and its conflict with their traditional, basic use or function.
Dorothy Parker's story, "The Waltz," is a masterpiece of the marriage between writing and language: the interior monologue (thought) of the main character, juxtaposed against what she actually says in response to the supposed questions the man asks which we never actually see (or hear). This trio of voices (the character's thoughts, her verbal responses to questions we can only imagine on our own) form the three threads which match the rhythm and stately musicality of a traditional waltz in 3/4 time.
In Ernest Hemingway's "Hills Like White Elephants," the dialogue between the characters is prominent, and in the forefront, but what they're discussing remains mostly a vague mystery. We get "clues" about the couple's discussion--"a simple, medical procedure"--that we begin to sense what they are discussing is likely a taboo subject, not legally, ethically, or morally up for discussion (abortion), and they, too, "dance" around the topic while the reader tries to piece together their jigsaw puzzle of their words.
The obvious ethnicity of "Girl" makes this rather short story a powerful reminder of race and gender and social stratification. A straightforward set of instructions/rules/guidelines from an older woman to a young girl broach a wide range of topics: mundane household duties (laundry); traditional skills like sewing, sexuality and public appearance, manners and etiquette, as well as traditional (ethnic) superstitions. A very modern take on dialogue (although it's really only a one-way conversation), without all of the encumbrances of traditional written dialogue (quotation marks and creating new paragraphs for each time the speaker changes), and still, somehow Kincaid manages to create a sophisticated story centered on gender, dialect, and language. As always, read the story before you watch the video.