In this paper, I have proposed that Winnicott's concept of potential s
pace might be understood as a state of mind based upon a series of dia
lectical relationships between fantasy and reality, me and not-me, sym
bol and symbolized, etc., each pole of the dialectic creating, informi
ng, and negating the other. The achievement of such a dialectical proc
ess occurs by means of a developmental advance from the 'invisible one
ness' of the mother-infant unit to the subjective 'threeness' of the m
other-and-infant (as symbolic objects) and the infant (as interpreting
subject). Failure to create or maintain the dialectical process leads
to specific forms of psychopathology that include the experience of t
he fantasy object as a thing in itself, the defensive use of reality t
hat forecloses imagination, the relationship to a fetish object, and t
he state of 'non-experience'. The 'processing' of a projective identif
ication is understood as the re-establishment of the recipient's capac
ity to maintain a dialectical process (e.g. of me and not-me) that had
been limited in the course of the recipient's unconscious participati
on in the projector's externalized unconscious fantasy.