If I'm reading your question right, you could do it at least 2 different ways.
The first way is to use an EditItemTemplate column with the same controls as your ItemTemplate column, except with the StudentMark label replaced by a textbox. Then, when you postback from the DropDownList, you can set the DataGrid.EditItemIndex equal to the index of the DataGridItem that was clicked. To change it back, just change the EditItemIndex to -1.
The second way to do it is to have a Label AND a TextBox bound to the StudentMark field. Then, just make one or the other visible, depending on what the value of your dropdown list is.
I hope this helps. ;)