Once, Zhuaghzi dreamt he was butterfly, a butterfly flitting and fluttering about, happy with himself and doing as he pleased. He didn't know he wasn't Zhuangzi. Suddenly, he woke up and there he was - solid and unmistakable Zhuangzi. But he didn't know if he was Zhuangzi who had dreamt of a butterfly, or a butterfly that was dreaming he was Zhuanzi.
Between Zhuangzi and the butterfly there must be some distinction. This is called the transformation of things.
The distinction of being awake and dreaming is false dichotomy. If one distinguishes them, how can one tell if one is now dreaming or awake?