The kid is psychotic
These are not simple, benign, distracting "dreams"... as diagnosed by that teacher the kid seems to have an unhealthy obsession of... these are way closer to full-on psychotic breaks from this adolescent's painful (well... corny family film "painful") existence. Of course, I have what is in no way even CLOSE to even an amateur's knowledge of the exorbitantly complex study of mental disorders - despite suffering from what the experts have deemed a "generalized anxiety disorder (Yin), with a generous side helping of depression; Yang. They seem to go together just... oh, so well. ANY-how, what the teacher refers to as normal everyday dreams... is decidedly not what this poor kid is experiencing. (Yes... EXPERIENCING. He in no way appears to control ANY aspect these... episodes of his.)
This kid needs medical help, man!! This isn't charming! It's NOT cute!! If I were his father I'd either be calling ####ing 9-1-1 or, failing that, a damn PRIEST!!!
I suppose it's a bit fortuity that the main subject of his delusions happens to be a Karate Master... 'cos when this kid grows up?? Yeah, he's gonna be a for real stalker. You hear about it all the time, tragedy after tragedy: famous face slain by a bark-at-the-moon-crazy "fan".
But then, perhaps I'm being too hard on such a damn silly movie like this. Yeah, that must be it.