This game continues the story from Dream Chronicles in which Faye is still trying to rescue her husband Fidget and her daughter Lyra from the clutches of Lilith.
The game is comprised of 25 chapters (screens). Gameplay is similar to the previous game with only a few changes. Whereas in the first game the player would solve one scene and then move on to the next scene, in this game the player may need to move between different scenes in order to solve a puzzle in order to progress. Also, after finding all the Dream Jewel pieces to complete a Dream Jewel, a puzzle will start in which the player is given a question and a number of sentence fragments which must be placed in the right order so that it answers the question correctly. Solving these dream jewel puzzles reveals hints for completing the scenes.