A gerund is a word that functions as a noun and is formed by a verb plus the "-ing" ending. In this case, the gerund is dancing. Even though "loving" also ends in "-ing", it is functioning as the verb or the main action of the sentence. The noun function of the gerund "dancing" is that of being the "direct object" of the sentence: the object that receives the action of the verb. In other words, what is Nicole loving? The answer is dancing.
