Dreams are literally just neural activity in the primary sensory areas of the neocortex that produces the impression of sensory perception. This means that neurons firing in the primary visual cortex create the illusion of seeing things, neurons firing in the primary auditory area create the illusion of hearing things, and so forth. If that firing occurs at random, these perceptions can feel like crazy, randomly fragmented hallucinations. So, I guess no? they're not physical so they can't be made of atoms
Dreams are the result of chemical reactions, which are made of atoms.
Anyone who can give it some thought can answer this. People here acting like these are impossible questions... !