Both Julio Cortázar's "The Continuity of Parks" and Jorge Luis Borges's "The Circular Ruins" begin with a clearly established bifurcation between reality and illusion. In Cortázar's story, the reality is the man reading the novel, while the illusion is the plot of the novel. In Borges's story, the reality is (at least initially) the foreigner living and mostly sleeping by the altar in the ruins and the illusion is the dream she has. The boundary between reality and illusion is very distinct at first, though as each piece goes on, that boundary begins to dissolve.
Cortázar's "The Continuity of Parks" is a literary mobius strip. It begins with a man sitting down to read a novel, and the story soon leaves behind this initial frame to focus on the characters in the novel the man is reading: two lovers steeling themselves before embarking on a dangerous mission. This mission, it turns out, is to kill the man reading the novel. After beginning in reality and then drifting into illusion, we see illusion engulf reality. Of course, we may wonder if the man reading the novel was ever outside the story he reads to begin with. At the beginning of the piece, we are told this about the man:
That afternoon, after writing a letter giving his power of attorney and discussing a matter of joint ownership with the manager of his estate, he returned to the book in the tranquility of his study which looked out upon the park with its oaks.
Were the man's attorney and the manager of his estate in cahoots with the man and woman in the novel? We can't know for sure, but by the end of the piece, the boundary between fiction and reality is porous enough to entertain such questions.
Borges's "The Circular Ruins" sets up a similar reality-illusion binary. The foreigner who comes to the ruins tries to conjure a human being in his dreams. Once the young man is formed, the foreigner teaches him, and before sending him to another temple, the foreigner "destroyed in him all memory of his years of apprenticeship." The reader may expect the man to encounter the young man, but Borges, ever the trickster, goes somewhere even more surprising. The story ends thus: "With relief, with humiliation, with terror, he understood that he also was an illusion, that someone else was dreaming him." As with "The Continuity of Parks," the story begins with what appears to be a hard boundary between reality and illusion. While it appears that illusion invades reality, one may wonder if there was any reality to begin with.