Hi Carol -
I think the telling part of your dream is the fact that, despite your attraction to this guy - to the point where you both don’t want to leave each others' company - you write “But we know we must.”
It’s clear that you are attracted to this man. As for whether or not to act upon your attraction, it’s your call. If you worry about the very strong emotions that inevitably are attached to the act of making love spoiling your friendship - then it sounds like you aren’t interested in anything beyond friendship with your co-worker. You write that you “consider him a good friend.” If this is the case, then I think you need to balance the thrill of the short-term intimacy with your own deeper suspicion (awareness) that you two, for whatever reason, are not compatible as lovers in the long run.
Making love will change your relationship - that is for sure. It can change it in a great way - or, as you say, it can confuse a friendship that sounds as though it has a nice foundation by pushing it in a direction that perhaps even both of you recognize is not going to work.
On a practical level, it is worth considering the fact that you two are co-workers. Most people will advise you that, as a rule, it is not a great idea to mix our personal and professional lives too much. The reason why is because work is vital, and because good relationships in a workplace are extremely valuable. In this context, I would also think twice about jeopardizing a work environment that currently seems pleasant and enjoyable.