Here's the challenge: There isn't actually a sentence in the dream sequence that directly refers to the reality of the situation. The entire sequence is designed to be a delusion, a fantasy crafted by Farquhar's dying mind.
However, there are moments within the sequence that *hint* at the reality:
* "He was now in full retreat." This line suggests the beginning of Farquhar's imagined escape, but also subtly implies the physical impossibility of his situation. He is still hanging.
* "The water, the banks, the trees, the bushes, the flowers, the houses, were all invested with an unnatural distinctness." This heightened sensory perception is often a sign of a dying brain, suggesting the unreality of the events unfolding.
The dream sequence itself is a masterful example of how Bierce manipulates the reader's perspective. He intentionally blurs the line between reality and fantasy, leading us to question what is actually happening.
Let me know if you'd like to discuss any other aspects of the story!