Context clues, it's rarely an issue in practice for native speakers: - "I dreamt about you last night" - clearly a sleeping dream - "I dream of being a doctor

Context clues, it's rarely an issue in practice for native speakers: - "I dreamt about you last night" - clearly a sleeping dream - "I dream of being a doctor" - clearly a future desire - "It's a dream come true" - ambiguous but the difference isn't important In my experience there's also a cultural implication/expectation that the different meanings are often intertwined, i.e. desiring something so strongly you have dreams about it.