Translation:This dolphin is not hunting, but sleeping.
Fun fact: Dolphins never fully sleep, they let each hemisphere of the brain sleep one at a time, because if the whole brain fell asleep, the dolphin would suffocate and drown: http://www.livescience.com/44822-how-do-dolphins-sleep.html
The course does seem to allow "pedig" to be "translated" as "it is", but I wonder. My sense is that only poetically can a conjunction be so distorted. The word is there as a conjunction, not as a "predicate" or verb-like "dummy form". "Pedig" means "and" according to my information. Its uses, applications, positions, etc. (as well as of all those other "and" words), are still a little bit vague to/for me. Help!
The base meaning of pedig (as a postposition; there is another variant out there) is "on the other hand". You're contrasting two things, but it's not something as excluding as "but". Pedig can be translated as "and", "but", "whereas", "while", and similar things. In this course it's mostly "and".
Hanem is something exclusive. Not A is happening, but rather B. The word hanem is missing a proper translation here, but then again English is weird and doesn't have a proper word for hanem, unlike some other languages ("sondern" in German, "sino" in Spanish). It's mostly translated as "but" or "but rather" in this course.