Either way, it's fiction.
Perceptions have little to do with reality: red isn't red but rather the perception of red; sound isn't sound but rather the perception of sound; touch is the firing of neurons interpreting pressure. Give someone schizophrenia and the voices in their head are very real--non-fictional, even though the rest of us say the folks are crazy and the voices unreal.
Granting that to be the case, than "reality" itself is, on an individual level, fictional--a narrative interpretation of external stimuli shaded by experience, capabilities, and physiological limitations/gifts. Dreams, then, being already-interpreted narrative re-interpreted and re-contexted, are just as fictitious as reality, and just as real.
:: grin ::