All great stuff being mentioned. I too and brainstorming a short film project that will have a fair bit of dreamlike, imaginative, hyper-reality sequences. Some thing I've thought of that haven't been mentioned.
Music is a huge one. The music selection along has an enormous ability to give a dreamlike feel. Something kind of trippy, repetitive, surreal sounding. It would vary greatly, depending on what type of dream it is.
The other one I'm focussing a lot of my thought on is camera angles and movements. I think a good combination of dolly, crane and steadicam movements, working in close with a wide angle, to give the viewer the feeling that they too are floating within the dream. Really high camera angles seem to make think of looking in on a dream. Odd angles and things that would otherwise be not great looking, but are allowable because it isn't reality. Dutch angles, maybe something like pushing in while rotating the camera on it's Z-axis. Whatever is cool and weird. I envision my sequence being very surreal, and kind of being shot in a quick-cutting montage style of just a lot interesting, in-tight, moving, incomplete shots. Never really showing the whole story in one shot, maybe never having a master shot at all.