Sometimes bettas can start to flare at seemingly nothing, it can indicate stress or it can be due to feeling like he has to express that this part of the tank is his and he's the boss.
I had a very flarey fish called Echo, he would flare at absolutely everything under the sun. I tried ensuring he couldn't see the betta in the tank next door, making sure his background and such didn't cause reflections, adding more plants so he could hide, removing plants, changing things in the tank around, feeding more, feeding less, changing food, changing filter, changing tank
. I could find NOTHING to help him.
Echo never used to be this grumpy; he'd do a wiggle dance every time he saw the slightest movement at the front of the aquarium but something changed in him as he grew older and he became very skittish and aggressive. His fins were always erect even if he wasn't flaring, eventually he burst his fins (it sounds worse than it is, I assure you).
Now... some fish are just flarey fish (like Echo) but it sounds like something may have spooked Dreamless. If he calms down in the "health tank" then you'll know that the problem is likely in his main aquarium, then you can have a look at him once you put him back and see if he is drawn to something that makes him flare. Is it possible that there is something on the outside of his aquarium that he doesn't like? It's been known for bettas to flare excessively if there is something on the outside that they don't appreciate.
I hope you are able to calm Dreamless down soon, I'm sure we'll figure it out