Dream occasionally after Ring fantasy (7)
I believe the answer is:
chimera
'fantasy' is the definition.
(I've seen this before)
'dream occasionally after ring' is the wordplay.
'occasionally' indicates alternate letters.
'after' means one lot of letters go next to another.
'ring' becomes 'chime' (eg a bell chimes or rings).
The alternating letters of 'dream' are 'ra'.
'ra' put after 'chime' is 'CHIMERA'.
(Other definitions for chimera that I've seen before include "Illusory aim; monster" , "Mythological monster" , "A wild fancy" , "Creature such as a gryphon" , "Fire-breathing female monster" .)