Sutra 3.2.1

1. In the intermediate sphere the creation (is effected by the soul); for (Scripture) says (so).

So far it has been shown that the soul in the waking state suffers affliction since, in accordance with its deeds, it goes, returns, is born, and so on. Next an enquiry is instituted into its condition in the state of dream. With reference to the state of dreaming Scripture says, 'There are no chariots in that state, no horses, no roads; then he creates chariots, horses and roads. There are no blessings, no happiness, no joys; then he himself creates blessings, happiness, joys, and so on. For he is the creator' (Bṛ. Up. IV, 3, 10). A doubt here arises whether this creation of chariots and the rest is accomplished by the individual soul, or by the Lord.—'The creation in the intermediate state' is due to the individual soul only. 'The intermediate state' means the sphere of dreams, in agreement with the passage 'There is a third intermediate state, the place of dreams' (Bṛ. Up. IV, 3, 1). And that creation is effected by the soul only; for what is referred to in the passages 'he creates,' 'For he is the maker,' is none other but the dreaming soul.