It is very atmospheric! And I really like the idea of going into someone's dreams. It's really a great start for a horror game. I can see it's becoming "stramable" after it's polished :)
The controls explanation is clear, though I agree on the use of items is not being intuitive. Maybe instead of "tab" to switch I would use a hotbar with items, then I can see which item I have and which key it is binded to.