It wasn’t a dream, they freed Schala from the core of Lavos and uncreated the time devourer and the fractured timeline. Some of it was technically a dream, but that “dream” manifested into reality because of Serge’s accident and them interacting at the time the experiment in the Sea of Eden split the timeline and creates real people (Lynx and Harle, and kind of Kidd, but she’s a projection of Schala that manifested by reaching out from the end of time and interacting with the consciousness of Serge during the splitting of the timeline/him dying/not dying in the Sea of Eden when he was a kid.) from Serge’s fears and memories.
I have no idea where you’re getting it was all a dream from, unless you didn’t use the Chrono Cross and got the bad ending, but that’s still not a dream.