Author commentary: It's not totally clear here why Dave's dream self appears to be already awake while his real self is also awake. I think we must infer that his dream self is in some sort of "waking trance" where he's technically awake but too preoccupied by certain things to be considered fully awake. (Preoccupied, for instance, by Dream Cal, who has been haunting his dreams for most of his life.) One thing that is clear, though, is the fact that throwing a ball of magic dream yarn at Dream Dave's head will snap him out of it.