When Andy is awake, his conscious mind strolls through the various places you came through on your way to where you are now. But at night, his thoughts remain here, in Dreamland.
Looking around, it kind of reminds you of Pepperland, but it's spookier and more sinister. It's very dark, and kind of foggy. Things appear in the darkness and solidfy before you, then crumble or fade away or transform into other things.
The only clear way out of this room is along a path on the edge of a mountain, with a sheer wall on one side and a precarious drop over a cliff on the other. The path goes back to the Dream Control Center.
You are gripped with the feeling that you have no control over what happens to you in this place.
From here you can go back to the Dream Control Center, or you can go to the Erogenous Zone. Or you can look at the map.