I think that this is part of him, especially if it is Motor Stereotypy, and he probably won't outgrow it, so helping him accept it is probably your best bet. John Hopkins is a great start.

There appears to be some anecdotal success with use of fluvoxamine in controlling the dreaming with maladaptive daydreaming (it does not stop it, just gives a person more control over it). I can't tell if it's really made a difference in our case, so it probably hasn't (DS takes it for anxiety).