Incidently, how do you measure dreams along this dimension you seem to think they have?
But don't you believe that sensations cannot be trusted? After all, isn't this why you don't believe there is a material world, because you only know of them through your senses? How then can you trust these dreams when they are just other senses? Why can you trust one set of senses and not another?
Careful with the wording there. I don't think dreams are sensations (in the one definition - caused by external stimuli). They are, in my opinion - for sakes to avoid professional technical discussion beyond my knowledge

-, qualia. Although dreams appear in the forms of sensation (visual imagery, smells, tastes, touch, even motion), they are internally created 'sensations'.
Still, I agree with your premise and the direction in which you take it. Dreams should be trusted much less than stimuli encountered during waking consciousness. I was just thinking about this last night as I lay in bed unable to stop thinking and fall asleep. Studies have tied dreaming with R.E.M.. They have also tied dream content to several factors (in general and not rigorously) such as stressful conditions, occupation of thought, last events/thoughts before going to sleep, etc.
And an interesting experience that I had to relay. Now this is totally subjective, but well observed on my part. Some years back, I had fallen asleep on my couch in the living room. I had a nightmare about being chased by 'aliens' or something in that specificity. I woke up from the 'nightmare' to find that a friend had arrived during my slumber, taken my "Aliens" laserdisc, and started watching the movie at good volume while I slept there. When I awoke, the correlation between what I had been dreaming and the sounds from the playing movie (which I had watched previously) were immediately recognized. Why would 'another dimension' be required to explain such a simple process? Although you are asleep (unconscious), your brain does not shut down. It just goes into special cycles which do not 'turn off' sensory awareness such as your auditory, olfactory, and other basic senses. What good is sleeping if a nocturnal predator can sneak up and eat you with no ability for sensory alertness whatsoever?
My question to Iacchus is this: If my dream/nightmare was directly correlated to external sounds in a familar format that conjured familar and relevant imagery, then how did the external stimuli get to that other dimension?