Do caterpillar eat dry leaves

Most species do not eat dry leaves, but some actually feed on only dry leaves. There is a whole family of moths called "litter moths" (Herminiinae) that feed on dry leaf litter. You've probably seen the adult moths fluttering around on the forest floor as you walk by them during the day; they're generally very dull medium-sized moths that fold their wings into a triangle. There are other caterpillars that feed on wood, fungus, aphids, cloth, grain, pollen grains, flowers, beans, and many other foods. Some are even parasites on planthoppers or in wasp nests. While "caterpillars eat living leaves" is a good rule of thumb, there are literally thousands of examples of species that don't follow that rule.