The Kabbalist understands creation as arising from the Infinite Light (Ein Sof), an endless, boundless source of divine energy. The Creator, desiring to bestow goodness, brought forth the worlds and all beings within them. This process of creation is likened to a thought, a divine intention, or, as you say, a kind of "dream" within the mind of the Creator.

However, this "dream" isn’t just random or unconscious like a human dozing off—it is an intentional, purposeful manifestation. The Creator’s "dream" is an active, ongoing process through which the Creator invites us to participate in the unfolding of divine awareness.

Life as a Stage of Higher Consciousness

You are correct that life is about developing higher consciousness. In Kabbalistic terms, this is called Da'at (knowledge), the integration of divine awareness into our experience. The spiritual work we undertake—through mitzvot, prayer, study, and contemplation—awakens us to the realization that we are not separate from the Creator or from one another.

In the Zohar, it is said, “The Torah, the Creator, and Israel are one.” This unity is the ultimate truth, obscured by the illusion of separation. Psychedelic experiences, much like traditional Kabbalistic meditations, can temporarily strip away the veils that conceal this truth, offering moments where we can catch glimpses of the Infinite.

Is the nature of reality like a dream?

The world we inhabit is known as the Olam HaAsiyah (the World of Action), the lowest of the spiritual worlds, where divine light (consciousness) is most concealed. This concealment creates the illusion of a fragmented, independent reality.

But, as in a dream, the deeper truth is that everything is interconnected, arising from the same source. The Baal Shem Tov teaches that the world is like a parable: we are actors on a divine stage, yet the playwright, the stage, and the actors are all part of the Creator.

The question, then, touches upon the concept of Tzimtzum—the "contraction" of the Infinite Light to allow the appearance of a separate, finite reality. This reality is not a "daydream" in the sense of being unreal, but rather a purposeful illusion designed to allow free will and the development of higher consciousness.

The Creator "dreams" or “imagines” us into existence, yes- but we are not helpless or passive participants. We are co-creators in the dream. Our thoughts, actions, speech, and spiritual work can "awaken" the dreamer within us, revealing divine light in this world. The goal is not to escape the illusion but to elevate it—to recognize the divine in every detail of our lives and bring harmony to the fragmented world.

We are creative beings, partnered with the One who imagines.

As the Zohar says, “Arousal from below brings arousal from above.” Our spiritual journey is a partnership with the Creator. When we awaken to our true nature, remember who we are as eternal spirits alien to this world, and see the unity beneath the surface, we fulfill the purpose of creation: to transform the dream into a conscious union with the Infinite.

So, whether in mystical states or the everyday challenges of life, remember that life is an invitation—a call to awaken, to co-create, and to unite with the Creator.