This is fun. The dream is the best way to go. You can have your players go to places they thought they'd never be. You can give them awesome weapons and you get to take them away from them when they wake up. You can turn something into something else, have the character walk through a wall, get chased by a monster, fall from a building and live, float through space, etc. You can make it a nice happy dream or a terrifying nightmare. And it's best when they don't know it's a dream. Play like they're actually living it. You can freak them out by having friends turn on them. When they wake up, they might act all nervous around the other players. It's best to play them alone if interacting with other players. If you want to keep it as a big group (which could keep all the other players bored waiting for their turn and everybody knows what everybody's doing) talk to the other players and explain it's a dream and have them act how you want them to. But like I said, it's best to play the dreamer alone.

You don't have to stick to the dream. It's just my best example. I'm sure you can think of some weird enough stuff that happens while whey're awake that can screw with their minds. Play around with with this one. You can have a riot while they're just completely oblivious to what's going on!