Paper occupies dreams (4)
I believe the answer is:
ream
'paper' is the definition.
(a ream is an amount of paper)
'occupies dreams' is the wordplay.
'occupies' indicates the answer is hidden within the clue (I've seen 'occupying' mean this (letters for the answer occupy part of the clue)).
'REAM' is hidden in the letters of 'dreams'.
(Other definitions for ream that I've seen before include "500 sheets, perhaps" , "480 or 500 sheets" , "Lots of paper" , "Widen (hole); quantity of paper" , "Five hundred sheets of paper" .)