1. No, you cannot use the laptop as is since it does not have any operating system other than DOS.
2. You install any version of Windows 10 you like. The home version should be fine for most people. I think the educational version must be obtain through your school in your country.
3. If you do not absolutely need Windows 10, then you can look into Linux OS which is basically free. Some companies "sells" different versions of Linux (called distributions) such as RedHat, but what they are actually selling you is support. If you purchase the RedHat distribution and you have problems with it, then you can call RedHat for help.
There are a lot of different Linux distributions to choose from but I think Linux Mint is best for 1st timers at least based on what I have read. I have not used Linux, but I have been considering installing Linux Mint (unless I find a better distribution for 1st timers) whenever I can find a moment of free time.
https

/linuxmint.com/
Be aware that Linux is not compatible with Windows programs. If you need to use Windows programs, then do not bother with Linux. Also, free Linux distributions mean if you need any type of help you need to rely on help from the Linux community forums.