I really like this idea; the idea that they're not permanently stuck in the D&D world, but merely "dream" it each night. It's been done before: .HACK, Accel World, Sword Art Online....I suggested before, that rather than supplanting the characters from their modern setting, or simply having a nominal generic fantasy setting and calling it D&D -- the two worlds exists side-by-side, each seen as a dream world to the other. Characters who's basic persona is reborn each night as a symbol of their idealized form of power -- a ranger, fighter, mage, rogue, cleric and so on -- who undertake quests and combat problems which have an underlying subtext derived from events in the "real world". Their fantasy counterparts are not, however, from the 21st century.
I like the idea because with this angle, conflicts between characters in the "game world" carry over into the real world. Teenagers who are real-life friends or at least classmates can become opposing sides in the game world. I don't want over-the-top shonen rivalries, though. I want realistic reasons why kids can become enemies in another world. Off the top of my head:
(1) "Dude, lighten up. Who cares what happens to them? It's only a game/dream/not-Earth!"
(2) The flip side where a kid with an intense worldview (Anonymous, for example) finally finds an outlet in the D&D world, and as a result comes into conflict with his classmates who have more conventional moral scales.