Good question, but I don't think so; the context of this quote is natural philosophy (that is, what is the soul, what are it's properties, etc.). Patrocleas is saying that pain is a bodily sensation, but since the soul withdraws from the body when sleeping, pain is not possible and thus pleasure (at a minimum, relaxation and recuperation) results. (He uses this as an axiom to reason about the soul's properties after death, etc.)

He doesn't speak about dreams specifically, but my question follows from the argument (at least as I understand it—I could be wrong!).