If you draw the Library encounter, you doze off & enter The Dreamlands. Have an encounter there, then immediately return here.

Does this mean you go to the Dreamlands have an encounter there & return to the Library all in one turn. If so what happens if you get delayed there do you go back to the Library still delayed.

Unless you fall Unconscious/go Insane, you are going to return to the Library, and if you became Delayed in Dreamlands, you are still Delayed when you return. Yes, it is all in 1 turn.

Does Luke get a clue token ?!

StarBurn said:

Yes, he's entered an Other World space, as per the encounter's instructions!

This is actually my favorite encounter in the game. So full of theme.

Then there's the Dreamlands encounter on this CotDP card.

http://www.arkhamhorrorwiki.com/Image:Gate120.png

Get that one as your Dreamlands encounter from getting that library encounter, go the Library with it, and then try to figure out whether your Investigator is really awake or not after it's all finished.