Psalm 126:1, "When Yahweh brought back those who returned to Zion, we were like those who dream," expresses the overwhelming joy, disbelief, and almost surreal feeling of the Israelites upon their return from exile in Babylon. Let's break down what each part of the verse means:

"When Yahweh brought back those who returned to Zion..." This refers to the historical event of the Jewish people returning to their homeland of Zion (Jerusalem) after being exiled in Babylon for about 70 years. This return was seen as an act of divine intervention, a fulfillment of God's promise to restore them. "Yahweh" is the Hebrew name for God, emphasizing the belief that this return was orchestrated by Him.

"...we were like those who dream." This is the key to understanding the verse. The return was so miraculous, so longed-for, and so improbable that it felt unreal, like a dream. It conveys several related ideas:

Joy and Elation: Dreams are often associated with positive emotions. The return was a moment of incredible happiness and relief for the exiles.
Disbelief: The situation had seemed hopeless for so long that the reality of their freedom and homecoming felt too good to be true. They were in a state of joyful shock.
Surrealism: The experience was so profound and unexpected that it transcended ordinary reality. It felt like they were in a different world, a world they had only dared to imagine in their dreams.
Transient Quality: Dreams can feel very real, but they are ephemeral and quickly fade away upon waking. There's a hint of concern in the simile, perhaps a fear that this wonderful experience might somehow vanish.

In essence, the verse captures the profound emotional and spiritual impact of the return. It was a moment of such overwhelming joy, relief, and disbelief that it felt as if they were living in a dream. The comparison highlights the divine nature of the event and the powerful emotions it evoked in the returning exiles. It emphasizes the extraordinary nature of God's intervention in their lives.