Green’s Dictionary of Slang

a dismissive excl.: don’t you wish!

1953		‘John Monahan’ [W.R. Burnett] Big Stan 12: ‘You’re the guy should be chief.’ ‘Dream on, Joe’.
1962		W.R. Burnett Widow Barony 35: They looked at him in amazement. [...] ‘Dream on, sucker,’ said Pete.
1987		(con. 1967) E. Spencer Welcome to Vietnam (1989) 19: I thought at the time that he was different than I. Dream on, Ernest.
1991		P. Cornwell Body of Evidence (1992) 175: ‘I don’t suppose he’s a journalist for some tabloid,’ I said in jest. ‘Yo. Dream on.’.
1999		Observer Screen 25 July 6: ‘No, Mr Bond,’ replied the rotund villain. ‘I expect you to die!’ Dream on. Mr Bond didn’t die.
2000		Guardian Travel 29 Jan. 19: Well, dream on.