The setting was a medium sized city in Canada; a little smaller than Oakville, but bigger than Woodstock. I suspect it was near water. The houses were tall (many three stories, plus the occasional commercial building that was taller, and a yellow-stoned church), and old (around 100 years old). The architecture style was gothically influenced with peaked arched windowsand jutting brick window ledges. Yellow and grey was a common brick/stone colour, though there were some houses done in red or grey brick as well.
The main character was at a family reunion or something similar. He was riding around on a motorcycle through the city's residential area. There was a bit with someone (the main guy, or someone else, possibly a little girl) trying to climb the wall of a church made of yellow stone that was blackened on the outside; a lot of the old U of T buildings downtown have the same black build up; it's either pollution, or (more likely) the scars of an old fire. The climber didn't get far.
Main guy then went and met Tall Guy, who he had known distantly before. Tall Guy was trying to get a hammer free from a scrap pile in a garage. Main Guy helped out. There were some other, younger people around as well.
Having got the hammer free, Tall Guy and Main Guy went "around back" to some kind of abandoned factory full of black dirt/rock/slag. In one of the piles of industrial junk, there was a concealed door which led to a tunnel that went to the US. Tall Guy and Main Guy (so named because the dream was from his POV) go the door open, but then they were apprehended by the Accented Folk.
The Accented Folk seemed to be from an earlier era; at least one of the men had muttonchops, and their style of dress seemed to be from the turn of the century (early 1900s). They spoke in accents that were suggestive of the British Isles, without being strong enough to suggest that they were brits/scots/irish. This, combined with the idea of being close to water, makes me think that the city was in the Maritimes, on the Canadian East coast, where the accents can get pretty thick and Celtic.
The AF took the two Guys to a sitting room which was modern enough to have a TV in the corner. There was an old couch made form either old brittle leather or old brittle vinyl.
Main Guy was casually holding a silver long sword with a great deal of engraving along the blade. This made the situation into a cautious standoff beween the AF and the Guys. After some discussion, the AF recognized the sword, and one of them brought out silver (pitcher? trophy?) with many of the same runes on it as the sword.
"I think we're part of the same organisation" said the Accented Man.
"Where were your parents born?" replied Main Guy, who knew the Accented Man form somewhere else.
AM's family were from the British Isles, and furthermore, were members of the Order of Merlin, which is why AM's family had passed down the silver thing with the mark of Merlin on it.
The Order of Merlin, as it turned out, was a secret society that had fallen into shambles some time in the last two generations; the current generation had lost most of what the Order had once had. Main Guy was the chosen bearer of Excalibur, though he didn't quite know what that meant, or what was expected. The Order had mostly lost track of the sword, and the other relics that had been entrusted to it. Moreover, the precise goal of the Order had become muddied; it was known that they were to protect the sword, and the other relics, for some purpose and use, but the details of that were lost.
When I'd woken up, I managed to remember all this, and, while in the shower, started to work out a role-playing game world to support it. The name Order of Merlin would have to be changed, since it obviously comes from my having read Harry Potter. Unless I come up with something better, they'll probably end up being Knights Templar or something similar; I figured that this Order should have been the ones running the KT in any case.