Student or Learner
Dave: Are you sure you arenít coming back today, with me?
Amy: No, Dave. I told you Ė Iím talking to Saints Alive this afternoon.
Dave: Well, OK. Listen, Amy. Iím really sorry Ė I hadnít realized how upset you were about Joanne. Iíve been a bit stupid. All that stuff about you not being in the band any more.
Amy: Itís OK, Dave. I think Joanne had already decided before the contest that she wanted my place in the band Ė and my boyfriend.
Dave: Oh, but ...
Amt: No really, it's OK. I mean, you didn't lie to me, did you? I asked you and you told me.
Dave: It was Joanne's idea, actually - but I don't know why I didn't say 'no' right away.
Amy: Well, I wasn't very happy about it.
(ENLISH IN MIND 2, Cambridge University Press)
What does this 'No' mean? Does it mean 'No problem'?
It's just an interjection to stop Dave. It means something like "stop, you don't have to say any more."
I am not a teacher.