ISO camera question? And Sensor sizes?

It measures the sensitivity of the image sensor (sensitivity to light)

I set my nikon camera to D5300 ISO 800 shutter speed 1/45 and f2.8

my friend set his Olympus OM-D E-M1 to same settings but his image came out much better less noise & dynaic range was much better too. (lens Olympus 25mm & Olympus 45mm primes)

Also i used the sigma 17-50 f2.8 lens and was keep getting bit of flares from street lamps as we were shotting street lamps and walls.

his images were much better no flares no matter what… Olympus is micro four third but it is much more expensive camera set up than my nikon & sigma kit. Is this why his images were coming out with less noise and almost no flares & better dynaic rnage ( seems like his images recovered shadow details much better too)

I thought bigger senser better noise? What about dynamic range does the sensor size matter?

Unless you both used tripods to take pictures from the exact spot it's kind of guessing. He might have just had a steadier hand and\or the Olympus has a better electronic steady shot, since it's likely the noise\clarity was caused by slight camera movement. ISO 800 is pretty low if you were dealing with some lower lighting conditions. Unfortunately Nikon is known for having inferior post image corrective processing, which a photographer might argue doesn't matter that much if you get the picture\settings right in the first place, but other companies are getting so good at it goto brands like Nikon are falling behind. Newer designed senors let in a lot of light. For example you would probably find (to your utter disgust) a new iPhone or Pixel will take better low light pictures than a 2 year old full frame Nikon. But the newest full frame digital cameras will outperform the phones.

Also one tip when you manually set the settings you run the risk of it being not the best for the conditions. It's good to take a handful of test shots in full auto to see where the automatic meters are setting things, since when you take pictures with manual settings too far off the auto settings you risk more blur and noise.

Pitching the two cameras against each other in dpreview:

Yes, the nikon has a (slightly) larger sensor, but also (slightly) more pixels, so the actual pixel size may be comparable.

If you posted a few links to images, it would be easier - but first of all, are you comparing JPEG or RAW images?
In case of JPEG, a large difference may be the in-camera image processing.
Next, the Oly has an in-body image stabilization.
Finally, he was using prime lenses, you used a zoom.
→ too many differences between the two to attribute the outcome to any single point.

Mirrorless cameras are generally better in low light compared to APS-C dSLRs.