The illusion is dispelled only when darkness, or ignorance, vanishes. In other words, true perception is possible only when there is knowledge. We know that from the Vedantic standpoint, the waking state is also a dream. But our everyday experience seems to be otherwise: a dream is as much real to us as the waking state, if not more.
The dream objects and the enjoyment or misery arising out of them are very real to us. We know only on waking up that all that was after all a dream.
Even so, our experiences in the world during waking state are very real as long as we are participants in the dream called world. That it is a dream can be known only when our ignorance vanishes, when we wake up to our true divine nature. From the standpoint of a man of Knowledge the world and its events are mere shadows, since he is aware of Brahman, the divine substratum behind the world. This can be compared to a movie on a cinema screen.
For the man of Knowledge, the screen alone is real; what appears on it has only a secondary order of reality. He is not affected by the proceedings on the screen. Weapons, fire, rains or wind in the movie cannot tear, burn, moisten or dry the screen. Even so, our real nature, the Atman, remains unaffected by weapons, fire, water or wind, which affect only the body.
Source - Prabuddha Bharata Editorial July 2003