But you think you are, and that's all that matters.
You need to stop thinking so literally and start thinking a little more abstractly.
"Dreaming" that you're using the machine in a dream sets up your subconscious to accept the fact that you're about to go into another realm, it allows the subconscious to deal with it without getting defensive about it and rejecting it. None of the dreamers in this film, or in reality, for that matter, control their subconscious. They have to do things to fool it into accepting certain parameters.