Given that the strings are fixed length, you can compute the Hamming distance between two strings to determine the similarity; this is O(n) on the length of the string. So, worst case is that your algorithm is O(nm) for comparing your string against m words.
As an alternative, a fast solution that's also a memory hog is to preprocess your dictionary into a map; keys are a tuple (p, c) where p is the position in the string and c is the character in the string at that position, values are the strings that have characters at that position (so "the" will be in the map at {(0, 't'), "the"}, {(1, 'h'), "the"}, {(2, 'e'), "the"}). To query the map, iterate through query string's characters and construct a result map with the retrieved strings; keys are strings, values are the number of times the strings have been retrieved from the primary map (so with the query string "the", the key "thx" will have a value of 2, and the key "tee" will have a value of 1). Finally, iterate through the result map and discard strings whose values are less than K.
You can save memory by discarding keys that can't possibly equal K when the result map has been completed. For example, if K is 5 and N is 8, then when you've reached the 4th-8th characters of the query string you can discard any retrieved strings that aren't already in the result map since they can't possibly have 5 matching characters. Or, when you've finished with the 6th character of the query string, you can iterate through the result map and remove all keys whose values are less than 3.
If need be you can offload the primary precomputed map to a NoSql key-value database or something along those lines in order to save on main memory (and also so that you don't have to precompute the dictionary every time the program restarts).
Rather than storing a tuple (p, c) as the key in the primary map, you can instead concatenate the position and character into a string (so (5, 't') becomes "5t", and (12, 'x') becomes "12x").
sthe same size as then's considering your last paragraph?