The dream machine was a device made by Irving Braxiatel.
The machine had a number of plays stored in it, with a holographic projector that could display them being performed. The projections were solid and could interact with the physical world. Braxiatel created a false background for the machine, making it appear to have been invented by a man called Aronholt. He made an artificial history for the planet Menaxus, making it seem it had a strong interest in theatre. He even had fake ruins built, including those of the Pentillanian Theatre, and planted the device there. He knew the Exec of Heletia was obsessed with theatre and would bring the device back to him. The device would then create a distraction when The Good Soldiers was performed, with the massacre at the end of the play made real by having the soldiers slaughter the audience. This allowed Braxiatel to lower Heletia's defenses and have its oppressive government overthrown by the Rippeareans. (PROSE: Theatre of War)