This update to Dreams included a new game and an overhaul of the creation experience. Media Molecule released "Ancient Dangers: A Bat's Tale", a dungeon-crawling action game featuring orcs and new PlayStation trophies. It couldn't be played in VR, but was one of the few Dreams creations that supported local co-op. Templates were released that allowed people to quickly created themed dreams. These included mini golf courses, speedrun challenges, 2D platformers, shmups, and a fully featured toolkit to modify their dungeon-crawling game into something new.

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Dreams: v2.35 "Dragons, Dungeons & Templates"