No, the Viet Cong is the snail. They have come against the most powerful military machine in the world, the razor, and emerged unscathed.
It is his dream, because as a special forces operative, that is his idea of perfect warfare.
It is his nightmare, because it renders the US vulnerable to SE Asian peasants.
(actually it also reminds me of the scene in Star Wars where the Millennium Falcon rests against the side of the Imperial ships' radar - it is too small to be caught and found)
It also becomes his dream because he sees the only way of combating it is to create his own force along those lines, using locals and treating them as harshly as the VC treat their own; "to kill without feeling ... without passion ... without judgment". This becomes evident when he discusses the incident where the children's arms are cut off :
I've seen horrors ... horrors that you've seen. But you have no right to call me a murderer. You have a right to kill me. You have a right to do that ... but you have no right to judge me. It's impossible for words to describe what is necessary to those who do not know what horror means. Horror. Horror has a face ... and you must make a friend of horror. Horror and moral terror are your friends. If they are not, then they are enemies to be feared. They are truly enemies.
I remember when I was with Special Forces. Seems a thousand centuries ago. We went into a camp to inoculate the children. We left the camp after we had inoculated the children for Polio, and this old man came running after us, and he was crying. He couldn't see. We went back there, and they had come and hacked off every inoculated arm. There they were in a pile. A pile of little arms. And I remember ... I ... I ... I cried. I wept like some grandmother. I wanted to tear my teeth out. I didn't know what I wanted to do. And I want to remember it. I never want to forget it. I never want to forget.
And then I realized ... like I was shot ... like I was shot with a diamond ... a diamond bullet right through my forehead. And I thought: My God ... the genius of that. The genius. The will to do that. Perfect, genuine, complete, crystalline, pure. And then I realized they were stronger than we. Because they could stand that these were not monsters. These were men ... trained cadres. These men who fought with their hearts, who had families, who had children, who were filled with love ... but they had the strength ... the strength ... to do that.
If I had ten divisions of those men, then our troubles here would be over very quickly. You have to have men who are moral ... and at the same time who are able to utilize their primordial instincts to kill without feeling ... without passion ... without judgment ... without judgment. Because it's judgment that defeats us.
It ultimately becomes his nightmare because the CIA are still able to get in there in kill him; in the form of a single man. A larger force would have attracted too much attention and been destroyed by either him, the VC or the NVA.