Right, always? That is a dream (7)
I believe the answer is:
reverie
'a dream' is the definition.
(I know that reverie is a type of dream)
'right always? that is' is the wordplay.
'right' becomes 'r' (abbreviation).
'always?' becomes 'ever' ('ever' can be a synonym of 'always').
'that is' becomes 'ie' (short for Latin 'id est', 'that is').
'r'+'ever'+'ie'='REVERIE'
(Other definitions for reverie that I've seen before include "Daydream or preoccupation" , "A day dream; a word used in the first ever 2 dn" , "Aimless train of thought" , "I revere in daydream" , "Daydream, meditation" .)