I have a non-Muslim friend who had a dream of an old Shaykh came to him and asks him to asks someone to perform Tahlil, Du'a' and feast at a mosque so as to pray for his health, peace, prosperity and well being. Are we allowed to do that?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

It is more appropriate to call this person to Islam instead of keeping yourself busy with this dream.

If this person wants happiness in this wordly life and in the Hereafter, he has to utter The Two Testimonies of Faith (which is to say "Ashhadu An-Laa Ilaaha Illa Allaah Wa Ashhadu Anna Muhammadan Rasoolu Allaah") (None has the right to be worshipped but Allaah, and Mohammad is His Messenger).

Therefore, you have to be keen in calling him to Islam with wisdom and good admonition. The Prophet said: "I swear by Allaah! If Allaah guides a single person through you, that would be much better for you than a great number of red camels (the most expensive type of camels)."  So this is more appropriate to be taken into consideration than being busy with feasts and dreams which have no importance.

Allaah Knows best.