Q: Are names and forms real?
Ramana Maharshi: You won’t find them separate from [reality]. When you try to get at name and form, you will find reality only. Therefore attain the knowledge of that which is real in all three states [waking, dreaming and sleeping].
Q: Is it a fact that dreams arise because of impressions received during the waking state?
RM: No, it is not true. In your dream you see many new things and many people whom you have never seen before in your waking state. You may even see a second dream within the dream. After waking up from the second dream, you may feel that you have woken up, but that is the waking state of the first dream. In the same way, man wakes up daily, but it is not to a real waking state.
Q: Why do we see the world as something real?
RM: We see so much on a cinema screen, but it is not real. Nothing is real there except the screen. In the same way, in the waking state, there is nothing but the [reality]. Knowledge of the waking state is knowledge of the knower of the waking state. Both go away in sleep.
Q: Why do we see such permanency and constancy in the waking state?
RM: It is seen on account of wrong ideas. When someone says that he took a bath in the same river twice, he is wrong because when he bathed for the second, time, the river was not the same as it was when he bathed for the first time. Somebody may say that he is seeing the same fruit every day, but really, a lot of changes are taking place in the fruit. On seeing the brightness of a flame, a man says that he sees the same flame, but the flame is changing every second. As the oil gets less and less, the flame keeps on changing. The waking state is also like this. The stationary appearance is an error of perception.
Q: Whose is the error?
RM: The knower.
Q: From where did the knower come?
RM: On account of the error of perception. In fact, the knower and his false knowledge appear simultaneously, and when the knowledge of the Self is obtained, they disappear simultaneously.
Q: From where did the knower and his ignorance come?
RM: Who is asking this question?
RM: Find out that ‘I’ and all your doubts will be solved. Just as in a dream, a false knower, knowledge and known rise up, in the waking state the same process operates. In both states, on knowing this ‘I’ you know everything, and nothing remains to be known. If, in the waking state, there is [inquiry] into the ‘I’, everything can be understood and nothing else will remain to be known. In deep sleep knower, knowledge and known are absent. At the time of experiencing the true ‘I’ they will also not exist. Whatever you see happening in the waking state happens only to the knower, and since the knower is unreal, nothing in fact ever happens.
Q: After waking from sleep, why does the world of the previous day appear the same?
RM: The world seen on the previous day was not real. It was the knowledge of an unreal knower. In the same way, the world of the next day is also is the knowledge of an unreal knower. For the [ignorant] the world is experienced as yesterday and today. But for the [awakened] the world is not there at any time, past, present or future.
Excerpted from here.