Q & A: "Cobb's memories sequence"
Q6.1) Was this a dream?
Answer: Yes, it was Cobb’s dream. He designed it solely to store memories of his past, and a place in which he could seek solace in. He told Ariadne, who entered his dream out of curiosity, that in his dream, Mal and his kids would always be together with him.
Q6.2) What was the significance of the elevator?
Answer: Cobb designed the elevator so that it would be able to take him to a specific memory that he wished to revisit. Each floor represented a memory of his. Some were from reality, some were from his dreams with Mal. He even created a basement level where he kept the memory of a distressed Mal on the day she committed suicide.