There are indications that dinosaur species existed with feathers, but these were not necessarily the ancestors of modern birds.
Sinosauropteryx was a carnivorous dinosaur that lived in present-day China 125-120 million years ago. It was about a meter long. Found fossils show that parts of the body were covered with feathers instead of reptile scales.
Avimimus was slightly above 1.5 meters, which also shows signs of dinosaur plumage much later (75-70 million years ago), also from China/ Mongolia, but sinosaurópterox. This is because the bones in his arm are the same size and shape as those found in modern birds. He also had a mouth that looked like a bird's beak.
Can these dinosaurs be considered as direct ancestors of birds? The answer is "almost certainly not" because the fossil record indicates that the birds evolved from a very different source.
What was the function of the feathered arms in this case if they were not the precursors of the wings?
It has been suggested that these dinosaurs were warm-blooded and developed feathers to keep warm in the winter. Other dinosaur species appear to have developed skins for the same reason. It could also be that the colored feathers could be used as a camouflage for the little dinosaurs who wanted to hide in the vegetation.
It is a common mistake to assume that the evolution process involves one type of object since any change between types of different time periods indicates a continuous progression from primitive to advanced. However, this is not the way evolution works. There are many "dead ends" in evolutionary history, so it should not surprise us to find common features in more than one evolution sequence of creatures, but also to discover that these functions perform different functions. There was never any certainty that the feathers would inevitably lead to flight. It turned out to be a final result, but it was not the case with the two species mentioned above.