Does Goodman Brown really attend a witches' Sabbath or does he dream about it?

The short answer is this: we don't know for sure.  When Goodman Brown implores his wife, Faith, to "'Look up to Heaven, and resist the Wicked One!,'" he is snatched away from the scene.  He finds himself alone, in the woods; the night is calm and everything he'd seen and heard moments earlier has vanished.  The next morning, he walks back into Salem, looking around at everyone with suspicion, though they all act precisely as they had before he had seen them (or dreamed he saw them) in the forest.  The narrator asks, "Had Goodman Brown fallen asleep in the forest, and only dreamed a wild dream of a witch-meeting?"  However, the narrator seems to imply that it really doesn't matter because, even if the Sabbath wasn't real, Brown believes that it was, and he is profoundly and negatively affected by it for the rest of his life.  He no longer takes pleasure in his wife, Faith, and he avoids her as much as he can.  Brown can never trust anyone again, and he has -- figuratively -- lost his faith, and so "his dying hour was gloom."