villain 26/21 over 77

Grabbed by Holdem Manager
NL Holdem $0.10(BB) Replayer
SB ($10)
BB ($10.25)
Hero ($10)
UTG+1 ($10)
CO ($11.82)
BTN ($6.17)

Dealt to Hero

Hero raises to $0.30, fold, CO calls $0.30, fold, fold, fold

FLOP ($0.75)

Hero bets $0.40, CO raises to $1.20, Hero calls $0.80

TURN ($3.15)

Hero checks, CO bets $2.40, Hero ?

should i just raise the flop and get it in? is it wrong to feel that villain might be raising a set on such a dry flop? i think this might be one of my greater leaks...