The line comes from early on in chapter 9. Oliver has recently arrived in London and is tired after his long walk. The Artful Dodger takes Oliver with him to his lodgings, where the young waif sleeps like a log. When he wakes up the next morning, he's still feeling incredibly tired, so much so that he effectively remains half-asleep. In his groggy, sleepy state, Oliver can see, through his half-closed eyes, Fagin fixing breakfast, can hear the sound of his low whistling and the scraping of the spoon against the saucepan. Yet at the same time, Oliver's mind is elsewhere, as indeed are his senses, engaged not with Fagin, not with the man actually standing in front of him in the here and now, but with almost everybody he's ever known. In his drowsy state, Oliver's mind and his senses are in another place entirely.