He means that we are all the same mind - the same consciousness. Consciousness has the property that it identifies itself with what it is experiencing - so it identifies itself with the ego's of the people it is experiencing, and thus feels that *it is* the ego that it is experiencing.
This can be experienced during meditation or a psychedelic trip (like you would get form LSD or Salvia) - you lose the perception of the ego and feel totally connected to everything. Then the next day when you experience the ego again, you feel disconnected from everything
The point is, there is only one conscious experiencer, but many conscious experiences. One dreamer, many dream characters.