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This scene occurs near the end of the play, at the end of Act 5, Scene 1.
At this point in the play, Romeo has already been banished from Verona and has been staying in Mantua. He wakes in the morning and believes the dream he has just had is a good omen. He says "If I may trust the flattering truth of sleep, My dreams presage some joyful news at hand."
When we learn the content of Romeo's dream, we cannot agree with him. He dreamed of Juliet, which is certainly nice. However, in his dream Romeo himself was dead! He says, "I dreamt my lady came and found me dead."
Romeo interprets this dream as a positive one because in the dream Juliet "breathed such life with kisses in my lips That I revived." Here, he is saying that in his dream, Juliet found him dead but kissed him and brought him back to life. Although Romeo believes this dream is happy, it is actually foreshadowing what will happen in Act 5, Scene 3.
At this point, his cousin Balthasar arrives to tell him Juliet has died. What Romeo does not realize is that his dream WILL come true -- in a way. He will go to Juliet's tomb and kill himself. Juliet will waken shortly after his death and will kiss him. That's where the similarities end, however. Juliet's kiss will not bring Romeo back to life, and she will join him in death not long after.
And so, Romeo's seemingly happy dream actually foreshadows the tragic events to come.
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