Harry is alone when he awakens in a strange, misty place. Soon it opens up to a “wide-open space, bright and clean, a large hall larger by far than the Great Hall, with that clear, domed glass ceiling.”
Near him, something is making a pitiful, struggling noise: “It had the form of a small, naked child, curled on the ground, its skin raw and rough, flayed-looking, and it lay shuddering under a seat where it had been left, unwanted, stuffed out of sight, struggling for breath.” Harry fears the creature and doesn’t want to go near it.
Dumbledore appears suddenly, looking very much alive, and pays Harry the ultimate compliment: “You wonderful boy. You brave, brave man.” Dumbledore tells Harry that he cannot help the child. The two of them begin to discuss the situation. Dumbledore confirms that he is dead but that Harry is not. Dumbledore says that Harry already knows the reason for this: the part of Voldemort’s soul that resided in Harry is gone forever. It was that part of Voldemort that was killed, not Harry’s actual soul.
Dumbledore then reveals that even Voldemort didn’t know that Harry was a Horcrux. Voldemort made him a Horcrux by mistake when he used some of Harry’s blood in the graveyard scene years ago when Cedric died. This same move secured Harry’s life by keeping a part of Lily’s protection intact.
Harry asks Dumbledore where they are, but Dumbledore turns the tables on Harry and asks him. Harry thinks the place looks like King’s Cross Station. Finally, Harry asks Dumbledore about the Deathly Hallows. Dumbledore admits to seeking them to overcome death. He says he is similar to Voldemort in that regard: trying to beat death with the Deathly Hallows instead of Horcruxes.
Dumbledore also confirms the truth: Harry is the descendant of the third brother, Ignotus Peverell. The Invisibility Cloak is, in fact, the real one. Dumbledore also ashamedly confirms his shady doings with Grindlewald and his part in Ariana’s death.
As they speak to each other, the creature periodically whimpers. Dumbledore admits that he wasn’t fit to be the master over death with the Deathly Hallows (for there was a point at which he possessed all three). He did, however, feel comfortable with the Elder Wand. Harry is the only one to be the master of the Deathly Hallows, possessing all three, and yet not run from death.
Dumbledore also reveals the issue with the Elder Wand. Now that Harry has seen Snape’s memory in the Pensieve, he knows that Dumbledore never wanted the Elder Wand to fall into Voldemort’s hands.
Harry is surprised that he has a choice of whether “to go back” or to go “on.” The only hint Dumbledore will give is to say that “I think that if you choose to return, there is a chance that he may be finished for good,” even though Voldemort still has the Elder Wand.
As a final bit of advice, when Harry looks at the strange creature again, Dumbledore says, “Do not pity the dead, Harry. Pity the living, and, above all, those who live without love.”
When Harry asks Dumbledore if this place and this conversation is “real,” Dumbledore comically wonders why something “inside my head” can’t be considered “real.”