> Sá var ljós og þótti honum hann vekja sig.

"He (this man) was fair/shining and it seemed to Kolskeggur that he
(the man) woke him up / roused him from his sleep."

honum = Kolskeggur

hann = the man he sees in his dream, accusative subject of the
embedded verb 'vekja'

sig = Kolskeggur, accusative, referring back to the dative subject of
the main verb 'þótti'