You could say In seinem Traum..., but it is not really necessary here in German to use the possessive pronoun.
I agree, "seinem" should probably be required
I guess "seinem" here refers to the Penguin (because "der" Pinguin). I thought it's somebody else's dream :D
Where is the possessive for his?
in seinen traum: in his dream; please review the answers, stop being confusing
Does this mean that "im" can also be a contraction of "in seinem" or is this an error? We normally get our wrists slapped for using something like "in the" when it should be "in his".