Suppose some U^⊆V^ dominates G^ with ∣U^∣≤k.
Here U^ cannot be taken as it stands — it may contain new vertices, so it is not a subset of V and certainly not a cover of G. Build U⊆V from it:
> For each x∈U^: if x∈V — put x into U; if x∈/V — put in one of its neighbours (by a fixed arbitrary rule; the choice does not matter).
U⊆V: for x∈U^∖V both neighbours lie in V, and in the first case we inserted x∈V itself.
Size: each element of U^ contributed at most one element, so ∣U∣≤∣U^∣≤k. (The same vertex may be inserted twice, making ∣U∣ strictly smaller — which only helps, since an upper bound is what is needed.)
U is a vertex cover of G: let xy∈E and suppose x∈/U; we show y∈U.
First, x∈/U together with x∈V forces x∈/U^ — had x been in U^, the construction would have put it into U.
Now consider vxy∈V^; it exists, since xy∈E so step 1 created it. As U^ dominates, either vxy∈U^ or some neighbour of it lies in U^.
Case 1: vxy∈U^. Then building U we inserted one of its neighbours — x or y. Since x∈/U, it must have been y, so y∈U.
Case 2: a neighbour of vxy lies in U^. Its neighbours are exactly x and y, both in V. Since x∈/U^, necessarily y∈U^; and as y∈V, the construction inserted y itself into U.
Either way y∈U, so xy∩U=∅. As xy was arbitrary, U is a cover of size ≤k, i.e. ⟨G,k⟩∈VC.