This paper continues a line of investigation begun in a previous paper on nested dreams and works of art in dreams (Balter 2005). Part I of the present paper seeks to establish that works of art with nested dreams and works of art within them display certain phenomena also observed in comparable dreams: (1) they unsuccessfully deny a painful reality represented in the nested element; (2) they present an antithetical view of that reality (both denying and affirming); and (3) they are consistently associated with the problem of reality (the problem of deciding what is real or true).

Part II of this paper seeks to establish the heuristic value of this line of investigation in dreams and art to elucidate the origin of reality testing.