@kennethamy,
Descartes gave his argument only an approximative formulation. Taken literally, the argument is flawed as equivocating on the notion of dream.
To resolve the equivocation, we have to extert charity and interpret the argument as including a state of mind which is only figuratively dreaming. Yet, a new question then arrises: it there any such a state? Of course, we don't know of it, just as the dreamer does not know of the state of being awaken (although he might be said to believe that he is awake).
Attempts to show that in some sense we are sometimes dreaming (absent-minded etc.) when we are awake are misguided. Although such states are often not really comparable to dreams, their relation to being awake is similar to the relation of dreams to being awake, and therefore do not move the resolution of the issue forward: if in fact we are in some meta-dreaming state, the question of whether there is a meta-awaken state is not solvable. However, we cannot exclude this possibility, and this was the point made by Descartes.
EB