In a way that shows your mind is somewhere else — floating on some pleasant thought instead of on the room you are sitting in. It describes how someone does something, so it goes with verbs of looking, speaking, and smiling: to gaze dreamily out of a window, to smile dreamily, to say something dreamily. The picture behind it is soft eyes and a slow voice, a person who is happy but only half present. It's warm, not an insult — quite different from 'absent-mindedly', which suggests you forgot something, or 'blankly', which suggests nothing at all is going on inside. Dreamily, there is definitely something going on inside; you just aren't invited. It leans literary. People write it in novels far more than they say it out loud, so it will look natural in your reading and slightly fancy in your speech.

出神地、恍惚地（帶著陶醉、心思飄到別處的那種）