I find that nature pictures work the best for making this dreamy effect to photos.
1.) find a photo i like to use photos that are a bit large such as 800 pixels & up

also small photos work as well.
I will be using this stock photo 1024 x 768 pixels
2.) now go to layer / duplicate layer / make sure that the new layer copy 1 is going to be used not the background layer. now go to Filer / Blur / gaussian blur set bur to 4.0 then go fade the layer into lighten set lighten to %100 & then merger the layers.
your image should now look like this
3.) this step is super easy. now go to layer / duplicate layer / make sure that the new layer copy is going to be used not the background layer. now go to Filer / Blur / gaussian blur set bur to 1.9 then go fade the layer into darken set darken to %25 & then merger the layers.
your image should now look like this
4.) this is the last step now go & save the image in any format you feel like i always save %99.9 of my work as .png the color is a-lot stronger & also it is better then .jpeg's
the final out come should look like this one will be saved as a .jpeg & the 2nd will be save as a .png
enjoy
