Yeah, that’s the bad ending where nothing was fixed and the fractured timeline continues and the time devourer still lives at the end of time and will eventually devour all of time and space. Not a dream, it’s another fractured timeline created by the time devourer in the final battle outside of time that separates Kidd from Serge so that Lavos/The Time Devourer can accomplish its goal. If you use the Chrono Cross in the final fight then Schala will be on the beach reaching out to Serge at the end, letting you know Schala is free meaning the timeline is fixed and Lavos was fully destroyed and never evolved to be the time devourer.

The story for Chrono Cross is convoluted as fuck, rivaled only by Kingdom Hearts. Chrono Trigger was a lot more straightforward and didn’t lather itself in poetry and philosophy, and it’s confusing time bullshittery doesn’t really come into play until new game+.

Legend of Dragoon is the dog’s bollocks, I love that game so much.