Step 1: Analyze the code: "CAT" → "DBU".
Letter positions: C=3, A=1, T=20 → D=4, B=2, U=21.
Each letter is shifted forward by 1 (3+1=4, 1+1=2, 20+1=21).
Step 2: Apply to "DOG": D=4, O=15, G=7.
Shift each by +1:
\[
4+1=5 \Rightarrow E, \quad 15+1=16 \Rightarrow P, \quad 7+1=8 \Rightarrow H
\]
Code for "DOG" is "EPH".
Step 3: Verify: Matches option (1).