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Dilemma is sometimes used as a rhetorical device, in the form "you must accept either A, or B"; here A and B would be propositions each leading to some further conclusion.
For example, I once found a large sum of money at a railway station. Some people might have been tempted to keep it. Perhaps if you had a low income and lots of bills to pay, this might be quite a temptation. I thought it would be a challenge to find the owner (his plane ticket was among the papers) and imagined the joy he might feel -- the pleasant surprise at having his money and papers returned. I managed to get his money back to him, and as a reward he made a donation to my favourite charity.
An internal conflict in literature and drama, is a struggle which takes place in the protagonist's mind and through which the character reaches a new understanding or dynamic change.
An example of this would be a student having to choose to study for a test or to watch tv.
Usually a dilemma involves a character issue. i.e. I know something is wrong, but it has benifits. If there was no internal sense of right and wrong, the dilemma would not exist. So even though outside forces create the setup for the dilemma, it is the nature of the person that gives it a place to roost.
Internal conflict is simply conflict with oneself. (Literally: conflict situated inside)
A dilemma is a [difficult] situation with two or more alternatives to choose from.
A dilemma is an *internal* conflict BECAUSE it requires a choice - which is made internally. It is unique as an internal conflict because since a "situation" and its outcome are external things, the choice made has a DIRECT, EXTERNAL consequence and resolution. This differs from such conflicts as deciding one's own character or opinion - which have either indirect or no external consequences.