When Boone sees Omri, he thinks he’s hallucinating. He does not think Omri is real but a result of his delirium tremens, which are hallucinations specifically caused by alcohol withdrawal. Overall, Boone is confused and befuddled. He can’t seem to figure out “what’s goin’ on around here.” He’s not sure if Omri is real, if Little Bear is real, or if anything that is happening to him is truly occurring.
One big reason for Boone’s unsettled thoughts is Omri’s size. Omri is so much bigger than Little Bear. The size difference, according to Boone’s logic, means that one of them must be some type of delusion.
Little Bear’s attack on Boone probably didn't help matters much either. Before Boone sees Omri, he confronts Little Bear, who, provoked by the cowboy, considers him to be his enemy and shoots him with his bow and arrow.
Fortunately for the cowboy, Omri intervenes. He scolds Little Bear for trying to harm Boone and then helps him retrieve his cowboy hat. Boone thanks Omri for giving him his hat back, even though he’s not sure he should thank him, because, to reiterate, he seems to be under the impression that he’s imagining things.
Omri doesn’t have to say much to change Boone’s way of thinking. He tells Boone not to worry about it. The cowboy then starts to tell Omri about what it’s like to be a sensitive, tenderhearted cowboy.