This story is arguably the most allegorical in Borges' The Garden of Forking Paths collection. It is a touching tale of the process of creation; not only does it treat matters of identity, but it also acts as a memorable foray into the realm of dreams.
The story begins with a wounded foreigner from the south of Persia fleeing to ancient circular ruins in the north. Upon resting there, he finds that his wounds magically heal - but he is not surprised to see this. The temple ruins appear to have one been colored like fire, but now have an ash color, destroyed by fire. Crowning the ruins is a statue of what might be either a horse or tiger, made of stone.
The man feels an obligation to sleep, and finds offerings by him when he awakes, which he takes to mean that the locals either "sought his favor, or feared his magic" (96). He then begins to work towards his goal of dreaming a man into reality. He enters a meditative sleep and concentrates all his efforts on dreaming, seeking to create through the dreaming process itself.
His dreams began as unbridled chaos, but soon shift to an amphitheater in which he lectures a collection of students in a dialectical style. He lectures on all manner of academic disciplines, and the students attempt to prove their comprehension with their answers to his question. Both while he sleeps and while he is awake, he ponders the students' answers to these questions, all the while looking for the one soul distinguished enough to be brought into reality.
He determines after nine or ten nights that nothing meaningful can be expected of students who merely parrot him because they show no independence of soul. Thus, he resolves to select and tutor only those who raise objections against his lectures. In so doing, he whittles the crowd of students down to one single youth.
At this point, the act of creation becomes more of a trial. The man first develops insomnia from the strain, and has to rest for a month without undertaking premeditated dreaming in order to dream again at all. Then, he begins to dream each part of the youth specifically through intensive focus, beginning with the heart and organs and eventually moving to every hair on his skin. At one point, he almost destroys his creation - and Borges remarks that he should have - but instead he makes an appeal to the statue of the ruins. The god Fire reveals itself to the man as a combination of a tiger, horse, bull, rose, and tempest (99). He tells the man that he will bring his dream to life and make him so real that only Fire and the man who dreamed him will know of his unreal nature, provided that the man instructs the youth in the rites of fire.
He instructs the youth for two years and sends him to train alone at ruins downstream. At this point the man feels tired and weak, and fears that the youth will eventually discover through his bonds to fire that he is not like others, but instead the product of someone's dream. The story ends with a holocaust of fire consuming the ruins where the man lives; he finds that the fire does not harm him, and thereby discovers that he is also the product on someone's dream.
It becomes clear at the end of the story that creation is a cycle of men dreaming each other, training the dream in the arts of fire, and sending the new dreamed man to the other ruins to repeat the process for himself. The creation is not aware of his origins until the apparent end of his existence, when he finds himself not destroyed by the forces of creation and destruction - i.e., fire. In this way, the concept of reality is held together by the illusion that dreams are different from reality.
Those who seek to create through the dream process believe they are more real than their dreams, and are therefore performing a supernatural task by bringing dreams into reality. Yet those creators are also the product of dreams. Thus only fire really acts as a facilitator of will: the dreamer harnesses the essence of reality more than brings something original into reality.
The surrealist tradition exploits the concept of liminality: the idea of meaningful borders between related concepts. Life and death, childhood and adulthood, day and night, are all pairs of concepts with a liminal relationship. In this piece, Borges identifies the border between wakefulness and sleep, dreams and reality; then, he calls into question the degree to which liminality actually exists.
Perceptual reality is largely characterized by a consensus among people about the existence of something. Borges plays with this notion by painting the only difference between dreams and reality as the fact that dreams only have a single observer: the dreamer. The dreamer can thus make his dream as real as he or anything else simply by willing that the dream be created by the forces of fire. Yet fire, the force which both creates and destroys, represents the very force that allows us to create and also recognize that we are no more real than our creations.