Dreamforging is art of making Armors and Weapons from rare wood/metal/stone produced by hightech resource buildings. Better tech and more workers ensure you get higher quantities of rare ingredients to forge into gear for your units.
Dreamforging isn't as hard as Dreamsorcery and gives much more useful in day-to-day use items - but it's a bit harder than Dreamweaving. It's a team exercise, do not even bother to delude yourself you are able to produce enough ingredients on your own - if you try to, you won't be able to do anything else all era.
You can find the list of all forging formulas here:
The main problem with forging is the fact that it is quite hard to find enough of lower level formulas to be able to make items based on them. This is something that your CV should do as a team - gather all formulas found by members in the vault so designated dreamforgers can turn them into items. More formulas they accumulate, more items you will be able to make later on.
Another problem is that the amount of rare ingredients produced is fairly low unless you heavily specialize in the particular resource building. This means that to even dream about setting up an industry in this branch you need at least three players to participate - one for each resource wood/metal/stone - willing to upgrade this building to the max, up to 160-200 workers and keep researching until the most rare items can be produced.
All higher tier Armors and Weapons require ingredients from all 3 resource branches, and one player can't realistically think about covering all of them.
The more people you get on board to specialize in particular resource and contribute both formulas and ingredients, the more items you will be able to make throughout the era. This is one of many ways to measure the level of teamwork in your CV, if there's enough people to accumulate sufficient amounts of forging items, you're on the right track with your team.
As with all other buildings designated to make items, you will need both research and production to make use of what your CV accumulated. Production of 500 is necessary to make simplest Soldier items, then 1100 more per each next level of gear up to nearly 5000 to make the best Warlord items.
Good news is that you can move workers out of the Smithy after they've made all the items and put them to other tasks until your CV accumulates more formulas and ingredients for you to work on.
Finally, Action Points seriously limit the amount of ingredients members of a CV can contribute to the vault and to weavers/forgers. You should be specific with resource producers what's necessary and what isn't to make items - so they use AP on sending you ingredients you can use.
Happy forging. :-)