Dream state in this regard has nothing to do with dreaming when you are sleeping but a state of mind. The dream state is what most people refer to as being alive and doing what they want. In reality however this is their dream state and they think they are awake. So, their daily life, where they think they are living the life they want is actually their dream state and are not doing what they really want. This is the ego life. The flip side of this is the awakened state life.