You will want to free up enough space on the internal C drive in order to install the update. I would start with running disk cleanup. Often previous updates are stored for a period of time and they can take up a lot of space. Disk Cleanup will allow you to remove those and other temporary files. The steps for this and some other storage management options can be found below:
Disk Cleanup
Here is how to run Disk cleanup in Windows 10
https://support.microsoft.com/en-us/help/4026616/windows-disk-cleanup-in-windows-10
To delete temporary files:
Search for Disk Cleanup from the taskbar and select it from the list of results.
Once Disk Clean up is open, select “Clean up system files” towards the bottom-left of the window.
Select the file types to get rid of. To get a description of the file type, select it.
Tip: Select Previous Windows Installations, Temporary Windows Installation Files, (if available) to clear old updates.
Select OK.
Moving Apps
Some apps can be moved to your SD card.
Open the Start Menu.
Select Settings.
Go to System > Apps and Features.
There will be a “Move” option next to any apps that support this.
Moving Other Files
Open the Start Menu.
Select Settings.
Go to System > Storage
Scroll down to Save Locations.
You can change the different file types to automatically be stored on your SD card going forward.