What is the BEST description and explanation for the underlined word in this sentence?

The barking dog woke the entire neighborhood with his incessant noise.
A) Barking is an adjective form being used to modify the dog.
B) Barking is a verb form being used as an adjective to modify the dog.
C) Barking is a verb form being used as an adjective to modify the noise.
D) Barking is a noun form being used as an verb to clarify incessant noise.