He played with his favorite toy.

Meaning: This sentence describes the dog's engagement in an activity for enjoyment or recreation using his most liked or preferred object.

Choice of Words: Played means to engage in an activity for enjoyment or recreation. Favorite means most liked or preferred. Toy is an object used for play. When you say "played with his favorite toy", it means the dog was engaging in an activity for enjoyment or recreation using the object he liked or preferred the most.