Can't Record Though Settings Are Correct

Every once in a while I run into a problem with Audacity, and this is one of them.
I have checked all settings in audacity and they are set as with all previous settings and versions of Audacity, at the present, I have Version 2.3.0 installed. The only difference being is that recently I’ve installed Dragon Naturally Speaking.
I’m thinking that Dragon is the culprit, but I would rather check and make sure prior to uninstalling.
I have a Soundblaster “Z” for audio and normally the settings in Audacity is MME, What You Hear (Soundblaster Z), 2 (Stereo) Channels and Speakers (Soundblaster Z). The record channel is at 0.67 and the Soundblaster “Z” Pro Studio is set to “Speakers”. Even though I can set my “Pro Studio” to "Headphones, "Audacity will still record.
Audio will play through the speakers, even if I open an audio file in Audacity with no problem but Audacity will not record. By right clicking on the “speaker” icon, I have checked everything to the best of my knowledge that all settings are correct
Could it be that Dragon Natural Speaking is the problem?

Yes it could be that Dragon Natural Speaking is grabbing exclusive access to the recording device.
Try shutting down Dragon Natural Speaking completely (so that it is not running in the background) and then try a test recording.