Yeah, the hard drive is dead.
Possible, but unlikely:
The connection between the hard drive and the motherboard has failed.
The motherboard SATA controller has failed.
Go to Best Buy or where ever and buy a new laptop hard drive. Take out the bad hard drive and install the new one. Then if your friend has the disks I would reload the operating system. If he/she doesn't have the disks you will need to call Dell.
If you get the operating system loaded on a new hard drive you can buy an enclosure or adapter that will allow you to connect the failed drive to a USB port. Then you can run file recovery software (if the drive is detected) if it's not detected then your out of luck on the old files. If the files are super important though you can take it to a file recovery service. (They are expensive though).