To answer this question, let's understand the code and its impact on the dataset.
The given code is reading data from a file specified in the "infile" statement and creating a dataset named "temp". The "input" statement is used to define the variables and their lengths to be read from the file. In this case, "salary" is defined with a length of 5.
Based on the given flat file structure, the value "1,120" is located at positions 1 to 5. Since "salary" is defined with a length of 5, it will read the value "1,120" from the file.
Therefore, the value of SALARY in the dataset TEMP would be 2.
So, the correct answer is Option C: 2.