Dream of Dreams
The Dream of Dreams, also known as the Inner Dream or simply the Dream, is the name of the mysterious state of consciousness sylvari experience prior to their "awakening" into the real world. In this state, they experience visions of the outer world and become acquainted with it through the past experiences of other sylvari. In this way, they learn things both trivial and vital about their future lives. Although the Dream is left behind by sylvari upon awakening in the real world, everything a sylvari experiences in their subsequent life is added to the Dreams of sylvari not yet born.
The Dream itself is said to be made of aether and memories, and is capable of showing not only the past and present, but also possible futures. The true nature of the Dream is unknown even to the Pale Tree, who acts as its custodian. The Dream of Dreams is also experienced by special non-sylvari, such as the White Stag and Fern Mastiffs, and the Pale Tree is capable of sending beings, including non-sylvari, into the Dream as well, through a portal similar to those which often lead to the Mists.
The Dream is described as being like a well, into which memories and thoughts of sylvari are poured. The portion of knowledge taken from the dream is like that of a bowl filling with water – each developing sylvari only takes a small measure of the information and memories. The Pale Tree herself ensures that each sylvari is then equipped with essential information, such as how to read, basic living skills, the tenets of the Tablet, and the assurance that she loves each of them.
Because the memories and information received differs among the sylvari, they are not without individualism. Upon leaving the golden fruit from which they are born, they are left to interpret what they saw in the Dream. As such, some of the eldest sylvari, the Firstborn, have stayed with the Tree to help newborn sylvari understand what they may have seen in the Dream. This includes lessons to explain the Tablet's writings as the sylvari interpret them, a better sense of sylvari history, and education about the world around them. 
The Dream can impart knowledge and sensation, but not actual experience. For example, upon being served a leg of roast moa bird, Killeen told Dougal Keane that she knows from the Dream what it is and how it will taste, despite never yet having tried it herself. Sylvari also have varying degrees of an empathic sense of other sylvari through the Dream, but only the Pale Tree can find true knowledge of memories of recent events in the Dream. Some sylvari, unable to cope with the overwhelming amount of sensations coming from the Dream, intentionally cut themselves off through meditation and become Soundless.
The sylvari believe the Dream of Dreams is moving them toward their collective "destiny," though they do not know what this will be, although some sylvari interpret their birth around the same time as the Elder Dragons' awakening to mean that the sylvari are Tyria's way of reacting to the dragons and attempting to fight them.
Within the Dream is a nightmare, tugging at the heart of each sylvari. Some sylvari are more susceptible than others, and those who have succumbed to the nightmare have formed the Nightmare Court, established by Secondborn Cadeyrn and led by the Firstborn Faolain. The Nightmare Court believe that the tenets of Ventari's Tablet have affected the sylvari's development, and seek to destroy the Tablet and convert the denizens of the Grove to the "true nature" of the sylvari, within the nightmare.
However, Malyck, a sylvari born from another tree, did not experience the Dream and was not exposed to Ventari's ideals; although less trusting and slightly more bloodthirsty than the sylvari of the Pale Tree, he is not consumed by nor attracted to the idea of nightmare. This indicates that either Malyck had been severed from his own tree's dream, thus keeping him from the sylvari's "true nature," or that the nightmare is not the true nature of the sylvari. It also indicates that the Dream of Dreams may be unique to the Pale Tree, which is distinguished from any hypothetical other trees by the presence of the Ventari Tablet, and, possibly, that it was planted on a human gravesite.