When I dream, why do I identify with the dream character Kathleen? I believe it's simply the force of habit. If I dream I am sitting in a room with friends, all the people, objects and the room itself are equally and only generated by my thoughts, by the activity of my sleeping brain.
I'm writing the script and directing the scene. So I could just as easily be inside the head of my friend Michael, sitting in the dream room with me. I'm not confined to Kathleen when I dream. It would be the same if I were writing a story. A creative writer can describe the scene from the perspective of any of the characters. The writer can also shift perspective, write a few pages from one character's point of view, and then switch to another's narrative. We are not confined to the identity of any one person, either in dreams or in fiction, as it all arises within one mind.
So when dreaming, I could potentially view my dream scenes from any perspective. But I always stick with the Kathleen character. I sense the dream world through her dream senses. She's my default avatar. This is simply habit. Sometimes she doesn't even have much in common with the sleeping Kathleen. She might be able to fly, or appear in a much younger form. But I stay "in" her, no matter how uncharacteristic she appears. It's habit, with perhaps a bit of insecurity thrown in. Do I know how to be Michael? It seems easier to be a flying Kathleen rather than "another" person.
And so it is in waking life. I am not this body/mind. I am the dreamer. I am not confined to the seeming physical body of Kathleen. I'm only here by default, by habit, by lack of imagination and perhaps by fear. So this month I've been practicing noticing that I am in all things. Or, it would be more accurate to say, all that I perceive is within Me - including me. All that is, is within this sense of being. It is within awareness. It is all within the dream. It is all equally and only made of thought. It is all Me. So I am free to recognize myself as a table, chair, tree, or a delicious piece of chocolate. I am quite the wonder, being all things!