As regards the literal meaning, I would say the expression refers to the period just before sunrise, when the first faint traces of light appear on the sky.
It can probably be used in another sense, to decribe the first glimmering of an idea that has just occurred to you. I'm thinking of a good context to illustrate my meaning (or rather an educated guess)...
OK. How about something like this:
'For a long while I kept thinking where I'd seen that face before. Then the light dawned. It was the man who...etc.'
Hope this helps.
Regards, Tee Kay