Right off the bat this person thinks of the dream as a "movie within the mind" - which makes him, paradoxically, both the observer of and participant in the dream. It's an example of dissociation, not unlike the Palace environment itself, where your avatar is "in" the Palace room while you observe the whole scene on your computer monitor. Because he doesn't see the opening credits, he initially is unaware that he is about to enter a world that is "just" a movie/dream.