The closing lines of the Zhuangzi's second chapter tell of Zhuang Zhou dreaming he was a butterfly, flying about pleased with himself and unaware he was Zhou at all, then waking abruptly to find himself unmistakably Zhou again. The text asks, without answering, whether Zhou dreamed the butterfly or the butterfly now dreams Zhou, and calls the uncertainty between the two the transformation of things.
Guo Xiang, whose third century commentary became the standard edition through which the Zhuangzi was read for most of Chinese history, resolved the passage toward equanimity rather than epistemological doubt. For Guo Xiang each thing, Zhou waking and Zhou dreaming alike, is complete and self sufficient within its own moment, so the passage teaches contentment with whatever state one occupies rather than anxiety over which state is the real one. The question of which is dreaming which, on this reading, is precisely the question a settled mind lets go.
Chan Buddhism, absorbing Zhuangzi through centuries of contact between Daoist and Buddhist thought in China, took the same passage toward a harder philosophical edge closer to its own teaching on the emptiness of a fixed self. Later Chan writers used the butterfly to illustrate that ordinary waking identity is itself no more grounded than a dream, an image compatible with but going beyond Guo Xiang's counsel of contentment. The two readings, contentment within apparent identity against the dissolving of identity altogether, both remain live in how the passage is taught, and neither can claim to be simply what the original two sentences say.