The narration in Mrs Dalloway flows along with the general direction and movement of the characters' thoughts, using stream of consciousness to jump from one thought to the next. This makes readers feel as if they're actually entering the characters' minds and following along as one thought leads to the next, as is the case in this passage, in which Clarissa Dalloway remembers a conversation with her old friend Peter Walsh:
[…] standing and looking until Peter Walsh said, ‘Musing among the vegetables?’ — was that it? — ‘I prefer men to cauliflowers’ — was that it? He must have said it at breakfast one morning when she had gone out on to the terrace — Peter Walsh. He would be back from India one of these days, June or July, she forgot which, for his letters were awfully dull.
The choppy, spontaneous flow is an accurate representation of Clarissa's actual thought process. Indeed, this stream-of-consciousness style portrays what it's like to try to remember something, as Clarissa attempts to recall what, exactly, Peter Walsh said one day many years ago when he found her ruminating on the terrace. The phrase "was that it?" is a perfect example of how the narrator seems to have entered Clarissa's mind, ultimately making her thoughts seem quite true to life, since everyone knows what it's like to wonder whether or not they're remembering something correctly.
The stream-of-consciousness narration in Mrs Dalloway allows the narrator to remain quite flexible and dexterous. This, in turn, makes it possible to capture the wandering, somewhat manic thoughts of a traumatized and hallucinating veteran (Septimus) as he looks at an airplane writing some sort of advertisement in the sky:
So, thought Septimus, looking up, they are signalling to me. Not indeed in actual words; that is, he could not read the language yet; but it was plain enough, this beauty, this exquisite beauty, and tears filled his eyes as he looked at the smoke words languishing and melting in the sky and bestowing upon him in their inexhaustible charity and laughing goodness one shape after another of unimaginable beauty and signalling their intention to provide him, for nothing, for ever, for looking merely, with beauty, more beauty! Tears ran down his cheeks.
The breathless pace of the passage portrays Septimus's whirling thoughts and the way his loose hold on reality quickly builds into a somewhat unexpected but overwhelming sense of joy. In particular, the few repetitions in this passage go a long way in making readers feel as if they're entering Septimus's mind, as if the narrator is stepping aside and allowing readers to experience firsthand what Septimus is thinking. This is especially apparent at the very end, as the narrator feverishly says that the people trying to communicate with Septimus are "signalling their intention to provide him, for nothing, for ever, for looking merely, with beauty, more beauty!" The rapid repetition of "for" mimics the pattern of Septimus's thoughts, making readers feel swept up in his fantastical imagination.
In this example of stream of consciousness, the third-person narrator blends so completely with Septimus—who's not thinking clearly—that it's as if the passage is delivered by an unreliable narrator:
A sparrow perched on the railing opposite chirped Septimus, Septimus, four or five times over and went on, drawing its notes out, to sing freshly and piercingly in Greek words how there is no crime and, joined by another sparrow, they sang in voices prolonged and piercing in Greek words, from trees in the meadow of life beyond a river where the dead walk, how there is no death [...].
The sparrow doesn't actually say Septimus's name, nor does it join with another sparrow and sing to him in Greek. But the narrator has so thoroughly inhabited Septimus's consciousness that the narration itself can no longer be relied on to accurately report what's happening—except, of course, for what's happening inside Septimus's head. There's a subtle escalation throughout this passage, as Septimus goes from thinking that a sparrow is calling his name to thinking that two sparrows are singing about death (or, rather, the absence of death, which is still a form of thinking about death). This, in turn, is a good indication of his state of mind: he's constantly pondering death, since he has severe trauma from what he experienced as a soldier in World War I. It almost seems inevitable, then, that these sparrows seem to sing to him of such matters. Stream of consciousness enables Woolf to fully immerse herself in Septimus's thoughts, illustrating how he thinks by presenting his wild perceptions as if what he's experiencing is actually happening.