There is a very simple way to create a dreamy or foggy look without using Photoshop. Purchase a cheap UV filter for your lens and smear some Vaseline on the lens, leaving about a dime size opening in the middle for focusing. You can add as much or as little Vaseline as you like.
If you don’t like the effect of the first try, use some soap and water to wash off the filter and try it again. This filter will keep for many, many years if you store it in a filter case. The hard plastic cases are the best for this. Give it a try, it’s fun to play with it and you never know what type of effect you can render.