How Could Dillon Have Seen David Cheating? **Spoiler Alert**
David was behind Dillon and to his right. For him to see David cheating, he would have had to turn almost completely around and see him without making it obvious. But since Dillon was "one of them" and David was a newcomer, they probably would have taken his word even though it seems completely implausible for him to have seen him cheating.
On top of that, don't you think Dillon would have said something immediately after the teacher brought it up to the class? I guess none of them thought of that.