Well the Dreamers can most certanly be considered not living by our standards can't they? If they perceive the being or race as a threat they will either enslave or eradicate. Law, order in a multiverse of chaos is something they strive for but know it is ultimately unobtainable. So they strive to establish order for as long as possible. Yes they know of the Fallen, they also know Ghoukas and the Fallen are enemies of the Dreamers. The enemy of my enemy is my friend.