Ryan Murphy posted to a recent discussion board the following:
1) the stabbing was not a dream sequence. We did that trick with Christian's funeral, and shant be doing it again.
2) Olivia did not hypnotize Julia, but I laughed when I read that and thought it was clever. But no.
3) I will not tell who dies and who lives because it's a plot point in the first episode back, which we are currently writing.