Grieg's "Anitra's Dance" from Peer Gynt plays over the scene; it's nice because it's recognizable classical music, but interesting given the whole roaming-the-desert Mosaic theme Blair presents us with later. Even more interesting is the fact that you can pretty much throw a dart at the collected works of Ibsen and hit some part of the Archibald-van der Bilt-Waldorf story. The music cues of this little Blair/Nate folly are all pretty great: after this, they're all remixes of Jazz Age classics. So even though we've got poor little flower girls and Eliza Doolittles facing off against each other in the dream, it's no wonder that Nate's looking more like an Atlantic City Amory Blaine. Well, maybe that's just his face.
So Cockney Blair is wandering some classy joint selling flowers when she sees Nathaniel, sitting with a glamorous figure whose gigantic hat obscures her face. She gets all excited and tries to sell him a flower for her, but then the figure raises her head: it's post-Higgins Doolittle Blair, looking ravishing and more than a little disgusted at the intrusion. "Please, Oi'm tryin' to earn money so as Oi can go to Yayo. It's moy dream, it is! Always 'as been!" As Nate gestures the maitre d' over to remove her, Blair laughs at her: "Yale? You foolish little girl. That dream is over. Time to wake up."
Normally the Audrey Hepburn dream sequences are either so vague they don't make sense, or so literal they are bullshit, but in this case it's interesting, because Blair's ongoing madness is getting so bizarre. She wants to go to Yale, but she can't get in, so she's blowing it off and saying she'd rather be a society wife, but specifically the society wife of Nate. Who is also at the end of a parallel journey she's been on, if you substitute "Chuck" for "Yale," and in both cases it represents the lazier and less terrifying choice.
Because every character in your dream is you, of course, but especially right now: they're both right. She really is making fun of herself. She really has given up one dream for another while simultaneously knowing better, and refusing to give up her dream. But most of all: both Blairs are selling out. From deep inside the post-feminism given her by both her parents, in different ways, she knows that "flower girl" is just as much a metaphor for "prostitute" as marrying Nate.
One thing Blair Waldorf has never had to contend with is being an object, the way Serena and Nate are: she's too prickly and too stubborn for that. (And Serena's in there too, being played by Blair: "The Rain In Spain" falls mainly on drunk highschoolers.) Which means she loses a lot of ground, not having the ability to hide her selfishness and intelligence as well as those two, and lacking the shapelessness that gives them such a leg up in fulfilling everybody else's desires. (This is, of course, the point of Peer Gynt, and why most Ibsen women eventually shoot themselves in the head.) But, she gains the ground of at least knowing that it's two sides of the same problem, and that she hasn't yet found the elegant solution for both -- how to get what she wants, without giving up who she is -- which is what the dream is asking her to do. Which is, after all, a lesson not even Lily's mastered yet.