Three principle elements describe the realm of the sanatorium. The first is its sensory characteristics: the sanatorium is cold, dark, and dirty. The second has to do with the sanatorium-town’s relationship to Joseph’s hometown, the former being a distorted reflection of the latter.  The third key element is the presence of real, material dangers in the environment in and around the sanatorium, which create an atmosphere full of anxiety and tension.

Throughout the story, Joseph remarks on the darkness of the world in and around the sanatorium. During his initial walk to the sanatorium, Joseph notices that the leaves on the trees are nearly black. The entire landscape is made up of different shades of gray, emanating from a single color, which Joseph calls “the color of a cloudy summer dusk in our part of the country.” In the hospital, the descriptions of darkness continue. The hallway has a “semidarkness.” The restaurant where Joseph goes upon arrival is only “half-lighted.” When exiting the restaurant, Joseph finds that the hallway “became even darker” – to the point of preventing sight completely. The next day Joseph goes outside and is struck again by the peculiar color and light of the environment. “Beyond the gate,” he relates, “I plunged into the heavy, damp, sweet air of that peculiar climate. The grayness of the aura had become somewhat deeper: now it seemed to me that I was seeing daylight through morning crepe. I feasted my eyes on the velvety, succulent blackness of the darkest spots, on passages of dull gray and ashen, muted tones – that nocturne of a landscape.” The references to darkness continue – a shopgirl’s face “misted over by dusk,” a lack of electric light in the bedroom Joseph shares with his father, a “chronic darkness” in the streets, the days growing darker and darker, as if, Joseph comments, “one were looking at the world through dark glasses.” Darkness, it seems, is the chief characteristic of this town and its sanatorium. It is not, in most cases, full, blinding darkness, but a duskiness that distorts vision and interferes with normal sensory function. Joseph accepts the impairment of his vision as a matter-of-fact, even though it is clearly extraordinary or bizarre. The ability to accept the extraordinary or bizarre is one mark of this realm as fundamentally different from the normal realm of ordinary waking life.

The environment’s temperature also runs counter to Joseph’s sensory expectations. We have already seen how cold and drafty was the train ride. The hospital’s temperature reinforces the idea that this non-real or surreal realm is colder that normal life. One would expect, for example, the room of a sick patient to be properly heated. Not so in Joseph’s father’s room, where “piercing cold air blew in through the window” and where the “stove had not been lighted.” 

Adding to the disorienting effect of darkness and cold is the general dirtiness or dereliction of the sanatorium and its environs. Joseph first encounters this shift of environment on the train, which is neglected and seems to be falling apart. Upon entering his father’s room in the sanatorium, Joseph notices that “a thick layer of dust covered the floor and the bedside table,” indicating that nobody has attended to the cleaning for months or years. Only after having spent some time at the sanatorium can Joseph take full measure of its state of being:

Joseph draws the conclusion that the hospital is actually not a functioning sanatorium and yet the cognitive dissonance created between his father’s stay in the place and the absence of ordinary hospital procedures (like lighting the fire, cleaning the room, or bringing meals) does not cause Joseph to question the overall reality of the place. It serves mostly to increase his anxiety for his father’s well-being. 

The world of the sanatorium might be dark or dusky, cold and neglected, but it is in many ways familiar to Joseph, for it exists as a distorted reflection of his hometown. While we see in Alice's Adventures in Wonderland elements of the waking life recast in the dreamworld, here we see a wholesale reproduction of reality, but distorted. Joseph reacts to this with surprise while at the same time fully accepting the rules of the realm, accepting, in other words, that two identical and yet different towns can exist. When Joseph’s father tells him he is going to his shop (for he was a seller of textiles back home) he describes its location thusly: “Do you recall the optician’s shop in the market square? Well, our shop is right next door to it.” The implication is that knowledge of home will guide Joseph in this place as well. When Joseph wanders down to the town center, he thinks, “What a strange, misleading resemblance it bore to the central square of our native city! How similar, in fact, are all the market squares in the world! Almost identical houses and shops.” Upon entering the textile shop, Joseph’s father tells him a package has arrived for him – thus blending the two worlds together. The two towns, Joseph’s hometown and the town of the sanatorium, are at once the same and different, a contradiction that is held together in the logic of the dreamscape.

Fear and anxiety permeate Joseph’s consciousness in the world of the sanatorium. He is fearful and anxious for his father, as demonstrated earlier. Other occurrences only add to the menacing nature of the place. The first sign of a real menacing presence in this world is the appearance of the dogs. “Packs of black dogs,” Joseph tells us, “are often seen in the vicinity of the Sanatorium. Of all shapes and sizes, they run at dusk along the roads and paths, engrossed in their own affairs, silent, tense, and alert.” The dogs’ eyes are “full of rage,” the dogs themselves in pursuit of some “mysterious goal.” The authorities of the sanatorium, who seem to be the governing authorities of the town, do nothing and can do nothing about the “plague of dogs.” The sanatorium itself keeps an enormous dog, “a terror of a beast, a werewolf of truly demonical ferocity," chained up just beyond its walls.

In addition to the dogs, another external threat challenges the serenity of the town: war. Joseph describes the intrusion of the enemy army and its effects on life in town:

As in Alice's Adventures in Wonderland, the slow creep of anxiety and fear eventually climaxes in a direct threat to the existence of the dream protagonist, in this case Joseph. The landscape of the dream shifts here, as in Alice’s Wonderland, such that the rational, observational protagonist is overcome with strong emotion, which then precipitate exit from the dream world. The enemy invasion marks the beginning of Joseph’s flight from the sanatorium.