Refer to figures.
EASA learning objective 022.03.01.01.03 states: 'Define the following terms: magnetic variation; magnetic dip (inclination).'
EASA learning objective 022.03.01.01.04 states: Describe that a magnetic compass will align itself to both the horizontal (azimuth) and vertical (dip) components of the Earth’s magnetic field, thus will not function in the vicinity of the magnetic poles.

The Earths magnetic field can be resolved into two components; horizontal (H) and vertical (Z). It can be seen from the figure that the lines of magnetism are not horizontal as they move away from the equator, the angle between the field line and the local horizontal is called magnetic dip.

A freely suspended compass needle works by aligning itself with the Earths magnetic field lines so the angle between the horizontal and the compass needle equals the magnetic dip.

Dip increases as you get closer to the magnetic poles because the H component gets weaker and the Z component gets stronger. At the magnetic poles dip is 90° due to the lack of any H component.

Theoretically a compass needle would point vertically downwards at the magnetic pole but the compass assembly in a DRC is mounted inside a casing so eventually an angle of dip will be reached where the rotating compass assembly is unable to move as it makes contact with the case, rendering it unusable.

made by a compass needle with the horizontal --> CORRECT. The compass needle aligns with the Earth's magnetic field, the angle between the Earths magnetic field and the local horizontal is called the angle of dip.

between the horizontal component of the magnetic field and true north direction --> INCORRECT. That's what magnetic variation is.

made by a compass needle with the local vertical --> INCORRECT. It's the angle between the compass needle and the local horizontal.

made by a compass needle during a steady turn --INCORRECT. The angle of dip is not a function of turning.