The Dream World is a strange world that Tak gets stuck in during Tak 2: The Staff of Dreams. It is an expansive world composed mostly of surreal and colorful platforms (which always appear suspended) and detailed backdrops. During the game, Tak is constantly sent here, everytime he gets knocked out, or falls asleep.
When Tak has gone 16 days without waking up, Jibolba and Lok get worried. In reality, Tak is being sent by the Dream Juju, who wants Tak to go to the tower, defeat the Dream Guardian, get the Staff of Dreams, and save the princess. If he refuses, he will be trapped forever. It is not known whether Dream Juju manufactures the earlier Dream World levels Tak explores. During his many day trip, he fights Nightmare Creatures, sent by the Guardian, and must destroy Nightmare Thorns to weaken the Guardian. Every so often, Tak gets to go through a portal to return.
Meanwhile, in the Real World, Tak is on a quest to find JB to get to the bottom of his dreams. After a long trip, Tak fights the Guardian and wins the Staff. However, the princess takes off her robe, revealing Pins and Needles had been impersonating her, and the Dream Juju was Tlaloc. After a struggle for the Staff of Dreams, Tak and Needles break the staff by pulling on it tug-of-war style and each reclaim half of the staff. Tak gets the Dream Shaker, while Needles gets The Staff of Nightmares. The rest of the game consists of chasing Pins and Needles to return the other half and complete the Staff once again.
As part of the chase, Tak goes through Rifts, which are dangerous parts of the Dream World, sometimes called the Nightmare World. Finally, Pins and Needles are caught, and they lose their half, just in time for Tlaloc to take it. Tak and Tlaloc struggle in the deepest, darkest area of the Dream World for the Staff. Here, Tak and Tlaloc turn into Dream Guardian monsters and fight. After Tak wins, he restores the Staff, and the Dream Guardian returns. Tak gives it to him, and the Guardian opens a rift for Tak to exit the Dream World and the game comes to an end.
A long while later, Tak and Lok compete in The Great Juju Challenge. Here, a level of the Dream World appears, called The Gates of Nocturne. It is very similar to the previous game's. There are still very dark places of the Dream World, but the Tower is not seen or mentioned, or the Staff.
- Rhinos (Tak 3 Only)