They ain't saying its a dream though, but rather parts of his life flashing before his eyes and getting all mixed up.
And since a lot of what happens in VIII is deelpy silly after the part where hes struck down it makes more sense for the rest to not make perfect sense if these are the images from his final moments.
If he did die at the end of the first disc then the things he discovers and all else could well be fabrications/fantasy.
Cheers for the welcome back. Am glad to see you're still truckin'
