This meme uses word play, it takes the literal meaning of ‘dream on’ and the expressive meaning of ‘dream on’.
There are a few examples of where adding the preposition ‘on’ after a verb to make a phrasal verb results in the preposition ‘on’ being understood as ‘continue’. For example:
go on – go ahead/continue
play on – continue playing
walk on – continue walking
etc.
In this case ‘dream on’ literally means, continue dreaming. However, ‘Dream on!’ is also used as an expression, and is usually used to answer an emphatic, ‘No’, to a question.
‘Not only is the answer no, but the only way that the answer will ever be a yes is in your dreams!’
For example:
9 year old boy: “Dad can I borrow the keys to your Ferrari?”
Dad: “Dream on!”
In the meme the boss has given the duck a definitive answer of ‘no’ but the duck decides to apply the literal meaning of the response and continues sleeping.
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