The scene begins with The Man From Another Place saying "Let's Rock." He then procedes to tell Cooper "I've got good news. That gum you like is going to come back in style." Cooper then looks to Laura who is wearing a black dress and sitting across from him. The Arm says "She's my cousin." He follows this statement up with "But doesn't she look almost exactly like Laura Palmer?" Cooper then says "But, it is Laura Palmer." before turning to her to ask "Are you Laura Palmer?" She responds with "I feel like I know her, but sometimes my arms bend back." The Arm then turns to Cooper and says "She's filled with secrets." He then says "Where we're from, the birds sing a pretty song and there's always music in the air." He then gets up and dances away. Eventually Fake Laura gets up and walks over to Cooper. She kisses him and whispers something inaudible into his ear. Cooper then wakes up.
Everything that happens in this dream is a clue as to who killed Laura Palmer even though it's actually not meant to be since the mystery wasn't supposed to be solved.