"It was but imagination, yet imagination had all the terrors of reality; nay, it was worse, for the reality would have come and gone, and there an end, but in imagination it was always coming, and never went away." (chapter 31)
One of the major themes of the novel is imagination vs. reality, sometimes portrayed through the dream world, and this quote illustrates the conflict Dickens creates between the two in TOCS. Nell is repeatedly accosted by "shadows" that frighten her with the force of reality. In the quote above, she imagines hearing her grandfather entering her rooms a second time, after having robbed her of the only money the two of them had so that he could once again gamble in an attempt to earn money for Nell once he is gone. Despite the fact that no one has entered her room, Nell remains gripped by the arms of fear for the time being.
In another episode, Nell overhears a conversation between her grandfather and some card players, who suggest that the former steal money from Mrs. Jarley in order to continue playing with them. Nell feigns her fear this time, by sharing with her grandfather that she "dreamed" that he would be tempted to steal money if they did not choose to flee from Mrs. Jarley's abode. In this instance, Nell uses the dream world to justify movement from what she imagines will happen if they stay put.
"There was an empty niche from which some old statue had fallen or been carried away hundreds of years ago, and she was thinking what strange people it must have looked down upon when it stood there, and how many hard struggles might have taken place, and how many murders might have been done, upon that silent spot, when there suddenly emerged from the black shade of the arch, a man. The instant he appeared, she recognised him—Who could have failed to recognise, in that instant, the ugly misshapen Quilp!" (chapter 27)
In the passage above, Nell imagines the strange people that must have passed through the arch way when her imagination becomes reality in the form of Quilp. It must have seemed like a dream to Nell, who is deathly afraid of Quilp. It is almost as if one's thoughts can be be realized upon thinking them. No matter how far Nell continues to run, this nightmare continues to haunt her.
One last scene involves the nursing of Dick Swiveller back to health by the Marchioness. Dick awakes from a long slumber, but imagines himself to be dreaming when he hears and sees the Marchioness in an adjoining room:
The same room certainly, and still by candlelight; but with what unbounded astonishment did he see all those bottles, and basins, and articles of linen airing by the fire, and such-like furniture of a sick chamber—all very clean and neat, but all quite different from anything he had left there, when he went to bed! The atmosphere, too, filled with a cool smell of herbs and vinegar; the floor newly sprinkled; the—the what? The Marchioness?
Yes; playing cribbage with herself at the table. There she sat, intent upon her game, coughing now and then in a subdued manner as if she feared to disturb him—shuffling the cards, cutting, dealing, playing, counting, pegging—going through all the mysteries of cribbage as if she had been in full practice from her cradle! Mr Swiveller contemplated these things for a short time, and suffering the curtain to fall into its former position, laid his head on the pillow again.
'I'm dreaming,' thought Richard, 'that's clear. When I went to bed, my hands were not made of egg-shells; and now I can almost see through 'em. If this is not a dream, I have woke up, by mistake, in an Arabian Night, instead of a London one. But I have no doubt I'm asleep. Not the least.'
Here the small servant had another cough.
'Very remarkable!' thought Mr Swiveller. 'I never dreamt such a real cough as that before. I don't know, indeed, that I ever dreamt either a cough or a sneeze. Perhaps it's part of the philosophy of dreams that one never does. There's another—and another—I say!—I'm dreaming rather fast!'
For the purpose of testing his real condition, Mr Swiveller, after some reflection, pinched himself in the arm.
'Queerer still!' he thought. 'I came to bed rather plump than otherwise, and now there's nothing to lay hold of. I'll take another survey.'
The result of this additional inspection was, to convince Mr Swiveller that the objects by which he was surrounded were real, and that he saw them, beyond all question, with his waking eyes.
Upon waking, Dick has trouble distinguishing reality from imagination and doesn't want to believe what he sees with his eyes. Aware that he is not himself, he convinces himself that he must be dreaming, until it is beyond all doubt. Dick readily embraces the imagination because his environment seems opposed to what he has become familiar with. He is no longer in the Brass residence though he sees the Marchioness seated before his eyes. Only after a mental evaluation of the entire scene does he realize that reality is as it seems. His identification of reality allows the narrative to continue.