There is no difference between dream and the waking except except that the dream is short and the waking long

The formless consciousness is the true self. When consciousness becomes aware of its formless true nature then there is nothing exits other than itself. Therefore, it is necessary to identify the self with the formless soul, which is the innermost self.

All states are mere illusion created out of consciousness. Thus consciousness is ultimate truth because the consciousness pervades in everything and everywhere in all the three states.   

On the standpoint of the  innermost self or formless consciousness:- 

There is no difference between dream and the waking except except that the dream is short and the waking long. the waking is parallel dream and dream is parallel waking experience.  the mind is in the form of universe. and universe appears as waking or dream. Thus universe,waking or dream or duality is one and the same thing. 

Because the waking experience  is long, one imagines that one thinks the practical life within the practical world within the waking experience as reality. deeper self-search revels the fact that self is neither the waking entity nor the dream entity but self is formless witness of the three states. thus three states are an object to the formless subject,which is consciousness.

The consciousness hidden within   the three states of waking, dream or deep sleep.  these three states are mere illusion on the standpoint of the consciousness ,which is the inner most self. their reality is exposed when the innermost  self becomes aware of its non-dual true nature and wakes up without the illusion. 

"There is nothing to accept,  Nothing to reject,  Nothing to hold on to,  Nothing to let go of,  Nothing to grasp,  Nothing to spurn,  Nothing to embrace,  Nothing to relinquish,  Nothing to dissolve because consciousness pervades in everything and everywhere in all the three states. Therefore everything is consciousness and consciousness is second to none.  

This is the truth.

How is one to know the real self? To think of the self is an object, as something that can be known and experienced is fallacy. All that is known within the waking or dream is fallacy because the three states are an object to the soul (emptiness), which is the subject. The subject (soul) is within the object but it is without the object. It (formless soul or consciousness)  is always no one (formless) because it is not an entity or identity within the waking or dream but consciousness  or soul (emptiness) pervades in everything and everywhere in all the three states.