I found this article on Hallucinations, and its really interesting. Its basically talks about how dreams and other forms of hallucination are as real as waking life.

http://www.medscape.com/viewarticle/431517_4

"Because functionally equivalent states of the central awareness system can arise from either memory or sensory sources, it is possible for dreams, perceptual memories, fantasies, and hallucinations to become indistinguishable from real events."