Is it normal that i dream when im awake?

I wake up and its not really real. I mean, I dream when I'm asleep too, but also when I'm awake. And not like daydreams where you can drift off into some blissful abyss, but like, vivid misconceptions of reality. I've been having trouble sleeping too. Three hours a night is not acceptable but I can't seem to alter my schedule. It's frustrating and deceiving and I don't much care for it.