I have a theory about that Dawn thing. It's just a theory, so of course it doesn't mean anything, but it might be interesting, I don't know.
Have you ever heard of that theory by the phycisist that goes, altenate realities are possible where any possibility is actually happening?
So what if there was an alternate reality where Buffy had a sister? The monks wouldn't have to create a whole new Dawn so much as merge the realities. Like any good magic trick though, when they pull the rabbit from the hat it looks like they created a whole new rabbit, and the innocent observer might report it as such.
The Theory that for every choice/action there is a universe that does each conceivable 'play out' of the event.
Yes thats something that is plausible, and i kinda believe we have seen a variation on this in the show, 'The Wish'.
Anyanka was not powerful enough, i dont believe, to create an entire new reality, but a universe shift is possible. This allowed Cordelia into one where the verse saw Joyce make a different decision, Cleveland not Sunnydale.
We, i believe saw this again in season 6, with Normal Again.
I don't believe this to be a play out in Buffy's Psyche, but actually the demon poison somehow allowed her concious to combine with that of the other Buffy in a Psych-ward.
Her struggle makes this fight a lot more poigniant because she actually does get to choose which Buffy she wants to be, and does explain why at the end of the episode we get one final look at the other Buffy.
So if these are plausible then surely there is a reality in which Dawn was born.
Think about what the Key did.
It opened up ALL the dimensions(universes?) broke down the barriers.
We know that the Monks tried to use the power of the key.
What if they had found a way to break the barriers between two realities this could explain why the memories of Dawn were so eaily grafted onto everyone in the entire verse, because she actually did exist.
When Buffy did that Spell, she saw both realities instead of just the new mixed one.