1. Open photoshop
2. Open an image
3. From the layer window, duplicate a layer ( give any name will do)
4. Select the new layer and apply Gaussian Blur by Filter > Blur > Gaussian Blur
5. Adjust Radius, e.g. 10 and click OK button to apply
6. From the layer window, select the blur layer and adjust Opacitiy to 30% to 40%
7. You will see your dreaming effect
Can I add... use a 50% eraser with soft brush to retrieve important features' sharpness?
eg. for portrait, bring back sligh sharpness for eyes, nose and lips.