You need to know if your WiFi dongle is setup correctly. You need to get it setup to redirect signals and not to act as a network card for the PC.
The PC also needs to be configured. When it's trying to get an IP address it's waiting for a DHCP service which is probably not running on your PC.
Use windows help and investigate internet connection sharing. It'll be a good start. As for getting the dongle configured.... All I can suggest is google
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