As their name implies, the Dreamlands are fantastic worlds that exist within humanity's dreams. Several stories by H.P. Lovecraft are set here, or were latterly relocated here, including The Doom That Came To Sarnath. Although not part of The Carcosa Mythos, some stories from the Carcosa Mythos occur within dreams or are dream-like, so it is possible that Carcosa could exist here. The Great Ones are the gods of the Dreamlands (and Earth's antiquity) and receive protection from Nyarlathotep.
A similar dream realm appears in Dreams of Shreds and Tatters.