Cthulhu Mythos Cosmology and Gods

Azathoth, The Reality Dreamer?

There is a common idea that Azathoth is responsible for dreaming the entire setting into existence (Including the Ultimate Gods and the void in which they reside), which will cease to exist once he eventually awakens, and so on and so forth.

As has been known for quite a while, by now, this whole concept is quite frankly pure headcanon that has little basis to actually back it up. For reference, this is the excerpt that serves as the primary piece of evidence supporting it:

"Out in the mindless void the daemon bore me,

Past the bright clusters of dimensioned space,

Till neither time nor matter stretched before me,

But only Chaos, without form or place.

Here the vast Lord of All in darkness muttered

Things he had dreamed but could not understand,

While near him shapeless bat-things flopped and fluttered

In idiot vortices that ray-streams fanned.

They danced insanely to the high, thin whining

Of a cracked flute clutched in a monstrous paw,

Whence flow the aimless waves whose chance combining

Gives each frail cosmos its eternal law.

"I am His Messenger," the daemon said,

As in contempt he struck his Master's head."

As you can see, there is not much suggesting that all of existence is Azathoth's dream in here, especially when this quote is viewed in a vacuum and with no preconceived notions in mind. Instead, it just says that Azathoth lies dormant in the center of the Ultimate Void, and mutters the contents of his own dreams, which are things that even he cannot understand.

For the matter, eldritch entities being in a state of "dreaming" is a recurring motif throughout all of Lovecraft's works, and the most well-known instance of it is Cthulhu himself, with the phrase that describes his current state being "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn," or, in English: "In his house at R'lyeh dead Cthulhu waits dreaming."

This is repeated in the higher echelons of the cosmology, where the Ancient Ones, the entities who reside past the First Gate and guard the entrance to the Ultimate Void, are described as residing in a dormant state, partaking in cosmic dreams until an explorer presents themselves to them and seeks to pass through the Ultimate Gate.

"At last, continued the Swami, the swaying and the suggestion of chanting ceased, the lambent nimbuses around the now drooping and motionless heads faded away, while the cloaked Shapes slumped curiously on their pedestals. The quasi-sphere, however, continued to pulsate with inexplicable light. Carter felt that the Ancient Ones were sleeping as they had been when he first saw them, and he wondered out of what cosmic dreams his coming had wakened them. Slowly there filtered into his mind the truth that this strange chanting ritual had been one of instruction, and that the Companions had been chanted by the Most Ancient One into a new and peculiar kind of sleep, in order that their dreams might open the Ultimate Gate to which the Silver Key was a passport. He knew that in the profundity of this deep sleep they were contemplating unplumbed vastnesses of utter and absolute Outsideness with which the earth had nothing to do, and that they were to accomplish that which his presence had demanded."

So, no, Azathoth being in a dreaming state doesn't necessarily equal him being the dreamer of all existence, in the context of the verse's themes and motifs. Likewise, there is plenty of evidence to suggest that he is on the same level of existence as the other Ultimate Gods: For instance, he is often described as sitting on a throne at the very center of the outer chaos, surrounded by servants that play music to him for eternity.

And, of course, you have the excerpt above, where Nyarlathotep literally punches him in the face out of contempt .