La Belle Dame Sans Merci Theme of Versions of Reality

The knight in "La Belle Dame Sans Merci" describes the dream he has towards the end of the poem, but the entire experience seems like a dream. Where does the dream really begin? Could the knight and his story just be a dream that the speaker is having? Are they in the real world, or in fairyland? What is real and what is fantasy in this poem?

1. "On the cold hill's side" is repeated in the fourth line of two stanzas (lines 36 and 44). Why does the knight want to emphasize where he was when he was sleeping, dreaming, and waking up?
2. Speaking of which, where is the knight when he falls asleep? In line 33, they're still in the "elfin grot," but by the time he's having the dream, he's "on the cold hill's side." When does he leave the cave? Why do you think so?
3. Could the entire story of the fairy lady just be a dream that the knight had? Explain your answer.
4. Could the knight himself be a figment of the speaker's imagination? How would that change your reading of the poem?

By echoing the original speaker almost word-for-word in the final stanza, the knight suggests that the sequence of events described by the poem is a self-perpetuating cycle.

The frequent repetition of images and particular words in "La Belle Dame Sans Merci" creates the impression that the poem is the dream of the unnamed speaker.