In dream2, the villain of dream2 taught me of dream1, the framing dream, how to forgive one's enemies and find common ground. I reported this to someone else in dream1, I think I was explaining dream2 to them.
When dream2 restarted, my antagonist recognized that we had already been there before and encouraged me to choose another path, that we both had a second chance and didn't have to choose mutual destruction.
He was similar to either a cartoonish Disney Captain Hook or a more realistic Jack Sparrow, perhaps both in some Schrödingeresque way, and we were flying, or perhaps swimming very fast underwater, destroying buildings as we fought.
Something something his ancestor, perhaps I was finding some treasure, it's already becoming very fuzzy, or perhaps we both ended up fighting some monster in the end. Our main fight would start in some restaurant each time and then it would take us to some underwater city ruins, with tall concrete-skeleton buildings and abandoned highway bypasses, which we would proceed to ruin even more with our epic Dragonball fight.
Also something something maybe we ended up rewriting the past and/or finally rescuing some people who had been marooned on some island for years. We got some flashback at the end of how people had had some plan years ago to hitch a ride on some passing sea monster, something about attaching and grabbing ropes, not too different from riding a sandworm. They had all done their best and worked together, but it was just too difficult, and in the end I think maybe a few got away, or maybe even they fell in the water at some point, and most were left stranded.
It is very unclear how the epic fight story and the marooned and rescued story fit together.