Yes -- the
Dream-Quest was one of the many releases of the Ballantine Adult Fantasy series, which began formally in 1969.
en.wikipedia.org
My sense is that non-sword-and-sorcery fantasy was not abundant in American paperbacks till 1969. The availability of non-S&S fantasy improved thanks to the Ballantine series. Some of it was, so far as I'm concerned, unreadable (I have no use for James Branch Cabell, for example), But some of it was of good quality.
I've listed above (#39) the small shelf of paperbacks available in 1967 that seem to me worthy to stand next to the Tolkien books. By the end of 1976 there would be several more -- the William Morris and George MacDonald reprints in particular. Also the original Earthsea trilogy, which was not issued in the Ballantine series. (Worthy to be on the same shelf -- but not as equals of
LotR!)
That Wikipedia link lists books alleged to have been considered by Lin Carter for publication in the Ballantine series, which ceased before they could appear there. My sense is that it's a good thing that the series did end when it
did, if the books considered were what we would have seen (the Morris books and perhaps a few others excepted).