In the preceding Pada or Section the passage of the soul to different spheres and its return has been explained in order to create dispassion or disgust in people who perform sacrifices to obtain heaven. If they have a clear understanding of the fate of the soul they will naturally develop Vairagya and will strive to attain Moksha or the final emancipation.

This section starts with the explanation of the soul's different states, viz., waking, dream, deep sleep. The three states of the soul will be shown to be merely illusory and the identity of the individual soul and the Supreme Soul will be established.

A knowledge of the three states, viz., waking, dreaming and deep sleep, is very necessary for the students of Vedanta. It will help them to understand the nature of the fourth state, viz., Turiya or the state of superconsciousness. For a student of Vedanta, the waking state is as much unreal as the dream state. The state of deep sleep intimates that the nature of the Supreme Soul is Bliss and that Brahman is one without a second, and that the world is unreal. Vedantins make a study of the four states very carefully. They do not ignore dream and deep sleep states whereas the scientists draw their conclusions from the experiences of the waking state only. Hence, their knowledge is limited, partial and incorrect.

In the last section the waking state of the soul has been fully dealt with. Now its dream state is taken up for discussion.

In order to make the students understand the true significance of the Maha-Vakya or the great sentence of the Upanishad "Tat Tvam Asi - Thou art That", this section explains the true nature of "That" and "Thou".

This Section starts with the explanation of the states of dream, deep sleep and so on. Then it discusses the twofold nature of Brahman, one immanent and the other transcendent. Lastly it deals with the relation of Brahman to the individual soul as well as to the world.

Adhikarana I: (Sutras 1-6) treats of the soul in the dreaming state. The vision in dreams is of a wonderful character. According to Sri Sankara the three first Sutras discuss the question whether the creative activity, attributed to the Jiva or the individual soul in some Sruti texts produces objects as real as those by which the soul in the waking state is surrounded or not.

Sutra 3 says that the creations of the dreaming soul are mere "Maya" or illusion as they do not fully exhibit the nature or character of real objects, as they are wanting in the reality of the waking state.

Sutra 4 intimates that dreams, although mere Maya, yet have a prophetic quality. Some dreams are indicative of future good or bad.

Sutras 5 and 6 say that the soul, although it is identical with the Lord, is not able to produce in dreams a real creation, because its knowledge and power are obscured by its connection with the gross body. The rulership is hidden by ignorance in the Jiva state. It is not possible for the individual soul to dream a good or a bad dream according to his own choice as he in his present state of bondage is ignorant of the future.

Adhikarana II: (Sutras 7-8) teaches that the soul abides within Brahman in the heart in the state of deep sleep.

Adhikarana III: (Sutra 9) gives reasons to assume that the soul awakening from sleep is the same that went to sleep. What has been partly done by a person before going to sleep is finished after he wakes up. He has also a sense of self-identity. He has memory of past events. He has memory in the shape of 'I am the person who had gone to sleep and who have now awakened.'

Adhikarana IV: (Sutra 10) explains the nature of a swoon. It intimates that swoon is half death and half deep sleep, a mixture of these two states.

Adhikarana V: (Sutras 11-21) intimate the nature of Supreme Brahman in which the individual soul is merged in the state of deep sleep.

Sutra 11 declares that Brahman is devoid of distinctive attributes (Nirvisesha). Brahman with attributes is only for the sake of Upasana or pious worship of devotees. It is not its real nature.

Sutra 12 declares that every form due to limiting adjunct is denied of Brahman. In every passage of Sruti identity is affirmed. The Supreme Truth is Oneness. Separateness is for devotion. There is only one Infinite formless essence or Principle in reality.

Sutra 13 says that the whole universe characterised by enjoyers, things to be enjoyed and a ruler has Brahman for its true nature.

Sutra 14 says that the assumption of diversity or plurality is objectionable. Brahman is destitute of all forms.

Sutra 15 says Brahman appears to have forms, as it were. This is due to its connection with its unreal limiting adjuncts, just as the light of the sun appears straight or crooked, as it were, according to the nature of the thing it illumines.

Sutra 16 says that the Sruti (Brihadaranyaka) expressly declares that Brahman is one uniform mass of consciousness or intelligence and has neither inside nor outside.

Sutra 17 says the other scriptural passages and the Smriti also teach that Brahman is without attributes.

Sutra 18 declares that just as the one luminous sun when entering into relation to many different waters is himself rendered multiform by his limiting adjuncts, so also the one Unborn Brahman.

Sutra 19: Here the Purvapakshin objects. There is no similarity of the two things compared as in the case of Brahman any second thing is not apprehended or experienced like water. Brahman is formless and all-pervading. It is not a material thing. Sun has a form. It is a material thing. Water is different from the sun and is at a distance from the sun. Hence the sun may be reflected in the water.

Sutra 20: The objection raised in Sutra 19 is refuted. The similarity is only in point of the participation in the distortion and contortion, in increase and decrease of the image reflected. Brahman participates as it were in the attributes and states of the body and other limiting adjuncts with which it abides. Two things are compared with reference to some particular points or features only.

Sutra 21 says the scriptures declare that the Atman is within the Upadhis or limiting adjuncts.

Adhikarana VI: (Sutras 22-30) teaches that the clause "neti, neti - not this, not this" in Brihadaranyaka Upanishad II.3.6 denies the gross and subtle forms of Brahman given in Bri. Up. II.3.1 and not Brahman itself.

Sutras 23-26 further dwell on Brahman being in reality devoid of all distinctive attributes which are entirely due to the limiting adjuncts or Upadhis.

Sutras 27-28: express the views of the Bhedabhedavadins. They say there is difference as well as non-difference between the individual soul and Brahman. The separateness and oneness is like a serpent in quiescence and motion.

Sutra 29: This Sutra refutes the view of the Bhedabhedavadins and establishes the final truth which has been declared in Sutra 25 viz., that the difference is merely illusory due to fictitious limiting adjuncts and identity or non-difference is the reality.

Sutra 30: Sutra 29 is confirmed. The Sruti in fact expressly denies separateness.

Adhikarana VII: (Sutras 31-37) explains that Brahman is one without a second and expressions which apparently imply something else as existing are only metaphorical.

Brahman is compared to a bridge or a bank or causeway not to indicate that He connects the world with something else beyond Him but to show that He is the protector of the worlds and is also like a causeway, the support of the individuals while crossing over this ocean of life.

He is conceived to be symbolised and located in a limited space for facility of meditation on the part of those who are not very intelligent.

Adhikarana VIII: (Sutras 38-41) intimates that the fruit of actions is not as Jaimini thinks, the independent result of actions acting through Apurva, but is dispensed by the Lord. The Lord who is all-pervading is the bestower of fruits of actions, according to merits and demerits.