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Gather Dream Terrain
Dream Grass Block and 
Dream Dirt are the ground layer of the Dream set. Break Dream Grass Block to get Dream Dirt, or place Dream Dirt and let it convert. 
Dream Farmland is the tilled version — use a hoe on Dream Dirt or Dream Grass Block to create it, then plant crops as usual.
Cut 
Dream Wood
Dream Log is the log block. Craft 
Dream Planks from Dream Log in the crafting grid. From Dream Planks you can make 
Dream Stairs, 
Dream Slab, 
Dream Fence, 
Dream Fence Gate, 
Dream Door, 
Dream Trapdoor, 
Dream Button, 
Dream Pressure Plate, 
Dream Sign, 
Dream Hanging Sign, and 
Dream Shelf. 
Dream Leaves and 
Diamond Leaves are the foliage blocks; 
Dream Sapling grows into a new Dream tree when planted on Dream Dirt or Dream Grass Block.
Decorate with Flowers and Mushrooms
Cyan Flower and 
Dead Flower are placeable plants. 
Despair Mushroom and 
Despair Mushroom Block are the mushroom pair — place Despair Mushroom on valid ground and use Despair Mushroom Block as a solid decorative block. These fit naturally alongside Dream Grass Block and Dream Leaves.
Build a Dream Base
Lay Dream Grass Block and Dream Dirt for the floor, Dream Planks for walls, Dream Stairs and Dream Slab for roofs and steps, and Dream Fence around the perimeter. Dream Door and Dream Trapdoor close the entrances. Dream Shelf and Dream Sign finish the interior.