I guess it could be a dream, looking at the convo after its ambiguous. It could be refering to what happened at night, or the entire day. I mean it starts specifying night but that could simply be talking in the kitchen.
Mom: Last night I..
Son: Do you remember what happened?
Mom: Yes.. I remember all of it. I just want to say thankyou for what you did.
Son: I mean its fine I didnt do that much really.
Mom: You did though. Son You said what I needed to hear. And I appreciate that. I appreciate you. And I didnt express it very well last night but, I really did enjoy our time together. It's been far too long. So thank you son. Thanks for keeping me company and making me feel worthwhile.
Son: Mom its ok I really dont mind. You are valuable to me. I love you mom.
PS there is a secret on the screen during that convo I didnt notice until getting the text. It will highlight when you move your mouse pointer over the object. Honestly didnt notice any of these before so will have to look out for them in future versions of the game.
"Do you remember what happened?" he is asking because she was drunk in the kitchen. Unless he is referring to doing the dirty deed.
"You said what I needed to hear" refers to that conversation in the kitchen. Unless it's what he said before she banged him.
"I really did enjoy our time together" refers to the previous day's workout session in the garage. Unless she is referring to fucking him.
All kidding aside, when he wakes up in the morning and she is in bed next to him, even he isn't sure if it really happened or it was a dream. But I think the morning conversation makes more sense if it was a dream. Also it makes more sense for the game's progress toward that goal. This game is, as some of you like to complain, blueballing you for months on end, right? So they're not there yet. And the final clue that it was only a dream is that it goes black just as it was getting interesting. ("Blueballing!")
After playing the Father side of the game, you can see why Mom is in Son's bed. In that side of the game, at bedtime the Father's options are
Go to Wife's bedroom or
Stay in guest bedroom. If he goes to her bed, then when he wakes up in the morning she is not there. He wonders if she left in the middle of the night and questions whether the choice to sleep in her bed was a good idea, or he supposes she just woke up in the morning before him. But we know that she did wake up in the middle of the night and decided she'd rather sleep in Son's bed than next to him. As things progress it's going to be interesting to see how Gumdrop either hides the growing incestual relationships from the other characters or reveals them with subtle clues.
BTW you don't have to
Reach higher to get this dream scene. If you
Let go instead, then you will wake up in the middle of the night and she will be in bed next to you with options to
Touch,
Kiss, or
Go back to sleep. Apparently you can touch with no consequences (to the remainder of this episode, but perhaps to future episodes?), but if you kiss then you won't get the dream scene and she will not still be in the bed when you wake up, thus you won't have the conversation when she wakes up either. So,
Let go is probably the preferred path. And none of this happens if you try to kiss her in the kitchen.