There are three states of consciousness  the Vedas give details of .

Deep sleep , dreaming, and  wakefulness.  In deep sleep conditioned life is  practically halted , almost entirely,  Srila Jiva Goswami , the renowned Vedic scholar , has compared this state to the impersonal brahman effulgence of oneness or nirvana. One totally forgets everything of life and the anxiety of pleasure of future conditions of upcoming karmic synchronicity.  Factually happiness , in the material world boils down to  an absence of distress  and can never be compared to the real happiness within our spiritual consciousness experienced with original spiritual senses as they  experience an unlimited flow of ever new  beauty and increasing enthusiasm to satisfy the emaculate senses of Divinity and His associates.

In  a dreaming condition, the living being is partially active , in  a  subtle realm ,  living out further karma.  Dreaming has many possibilities attached to it with certain impressions or messages sometimes given.

It is said night time dream or daytime dream , its a  similar experience , a man can have sex in his dream and pass semen , so real is the experience.

In Wakefulness, a full illusion and misidentification  of the false  body , mind, takes place . karma is experienced in its  full capacity , as one experiences what  appears reality,  but it’s just a longer dream .

Where is  reality ? That is the  subject of the Vedas , and those wishing to live in reality, can  easily familiarise themselves by  studying the Bhagavad Gita and the Srimad Bhagavatam , and begin to understand consciousness that is not conditioned by the material energies,  but is situation in its original pure intended state .