The narrator kisses the listener in parting. He tells the listener that he agrees that his life has been a dream, but he suggests that everything "is but a dream within a dream." He stands on the shore of the ocean, holding grains of sand as he cries. He cannot keep the sand from running out of his hand, and he wonders if he cannot save even one grain from the surf.
The structure of "A Dream Within a Dream" consists of two stanzas containing two disparate but ultimately connected scenes. The first stanza shows the first-person point of view of the narrator parting from a lover, while the second places the narrator on a beach while futilely attempting to grasp a handful of sand in his hand. The juxtaposed scenes contrast in a number of ways, as the poem moves from a calm, though solemn, farewell to a more passionate second half. Whereas the first stanza features a thoughtful agreement, the seashore scene contains expletives such as "O God!" and anguished exclamations along with despairing rhetorical questions to reflect the torment in the narrator's soul.
Despite the apparent differences between the two stanzas, they are linked through the ironic similarity of their evanescent natures. In the first image, the narrator is leaving his lover, indicating a sense of finality (and mortality) to their love. Accordingly, the falling grains of sand in the second stanza recall the image of an hourglass, which in turn represents the passage of time. As the sand flows away until all time has passed, the lovers' time also disappears, and the sand and the romance each turn into impressions from a dream. Through the alliteration in "grains of the golden sand," Poe emphasizes the "golden" or desired nature of both the sand and of love, but he shows clearly that neither is permanently attainable.
Like many of Poe's poems, "A Dream Within a Dream" uses the sea as a setting for a discussion of death and decay. "The City in the Sea" illustrates the imagery of a pitiless sea most clearly, with the Gothic allusions to the end of time, and in "A Dream Within a Dream", the "surf-tormented shore" becomes a second metaphor for time, as the waters of the sea slowly but inexorably pound away at the physical existence of the shore. The narrator regards the wave as "pitiless," but he further associates himself with the temporal nature of the water by weeping in tandem with the falling of the sand.
Although the two stanzas are not identical in length, their similar use of an iambic rhythm and of couplets and triplets in their end rhyme scheme creates a pattern that matches the parallel of their ideas. In particular, the refrain lines "All that we see or seem/Is but a dream within a dream" unite the passages in the poem's conclusion of futility and regret at the movement of time. Poe draws attention to "all that we see or seem" with alliteration, and we can view this phrase as the combination of two aspects of reality, where "all that we see" is the external and "all that we seem" is the internal element. By asserting that both sides are the also alliterative phrase "a dream within a dream," Poe suggests that neither is more real than a dream.
As the title, the phrase "a dream within a dream" has a special significance to any interpretations of the poem. Poe takes the idea of a daydream and twists it so that the narrator's perception of reality occurs at two degrees of detachment away from reality. Consequently, this reality reflects upon itself through the dream medium, and the narrator can no longer distinguish causality in his perception. By showing the narrator's distress at his observations, Poe magnifies the risks of uncertainty and of the potential changes to his identity. Time is a powerful but mysterious force that promotes cognitive dissonance between the protagonist's self and his abilities of comprehension, and the daydream proves to have ensnared him. Alternatively, the poem itself may be viewed as the outermost dream, where the inner dream is merely a function of the narrator's mind.