He was charged and was on the run, and they were actively looking for him so I think he was back in reality too...they wouldn't have been looking for him that hard if it was years since he fled the country, I wouldn't think.
But if the totem didn't top...then he would know that he was in fact dreaming and that he needed to just pop a cap in himself, which kind of makes it silly.
So I think he was forreal. It would be very difficult to explain how he was able to manifest all of those different people with individual personalities, etc, since all people have to be dream-sharing. Haha.
Great movie.