To do this, do Select > ALL (Ctrl-A) then Edit > Copy Merged then Edit > Paste. You will have a new layer at the top of the layers palette. Double click on the layer name and call it Dreamy Merged.
From the New Adjustment layer menu, choose "Solid Color..." and drag the cursor up to the top left corner of the color picker for a pure white color fill. Click OK. Drag this layer below the "Dreamy Merged" layer in the layers palette.


