Þegar ég var í leikskólanum var draumurinn minn lítill.

Questions & Answers about Þegar ég var í leikskólanum var draumurinn minn lítill.

Why does the second half of the sentence start with var?
This is because of the V2 (verb-second) rule. The entire first clause (Þegar ég var í leikskólanum) acts as the first piece of information in the main sentence. To keep the main verb in the second position, var must come right after the comma, jumping in front of the subject draumurinn minn.
Why is var used twice, and does it change form for different subjects?
Var is the simple past tense of the verb vera (to be). It happens to be the exact same form for both first-person and third-person singular. In the first part it matches ég (I was), and in the second part it matches the singular masculine noun draumurinn (the dream was).
Why is it draumurinn minn with the attached article instead of just draumur minn?
In Icelandic, when you place a possessive word like minn (my) directly after a noun, that noun almost always takes the definite article (the attached "the"). So draumur (dream) becomes draumurinn (the dream), followed by minn.
Why does leikskóli become leikskólanum here?
The preposition í (in) forces the dative case when it describes a stationary location, like "being" somewhere, rather than moving toward it. Since you were already at the preschool, the masculine noun leikskóli takes its dative form with the attached definite article, becoming leikskólanum.
Can I use hvenær instead of þegar for the word "when" in this sentence?
No, because hvenær is strictly a question word used to ask "at what time?". When you are making a factual statement connecting two events or describing a time period in the past, you must use the conjunction þegar.

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