I mean I obviously haven't played the game myself and I'm just going by what Wikipedia and TV Tropes says about it.
From Wikipedia:
AWE
AWE is a crossover between
Control and
Remedy Entertainment's previous title,
Alan Wake.
Alan Wake takes place in Bright Falls, Washington, and revolves around Cauldron Lake, a supernatural lake in Bright Falls, Washington with the power to turn artists' works into reality. Following the events of
Alan Wake, Emil Hartman, a psychologist who attempted to investigate and exploit this power, was confronted and arrested by agents of the FBC, who confiscated all of his research on the lake. In a final act of desperation, Hartman dove into Cauldron Lake and was possessed by the Dark Presence, the main antagonist of
Alan Wake. Hartman was subsequently captured and brought to the Oldest House by the Bureau, who attempted to contain him in the Investigations Sector. However, after Hartman breached containment, the Bureau was forced to completely abandon the sector. During the Hiss invasion, the Hiss mixed with the Dark Presence in Hartman, twisting him into a monstrous entity which now haunts the sector.
Jesse is summoned to the Investigations Sector by an apparition of Alan Wake, who disappeared years prior after diving into Cauldron Lake. As Jesse attempts to restore the Investigations Sector and destroy Hartman,
she learns from Alan that he was responsible for unleashing Hartman, using his power to rewrite reality using works of fiction. Wake also strongly implies that he was responsible for the Hiss invasion, in order to create a "crisis" for his "hero," Jesse, for unknown reasons. Jesse eventually reaches the Bright Falls AWE area of the Investigations Sector and destroys Hartman. She is then informed by FBC agents of a newly detected AWE in Bright Falls, the date of which is several years in the future.
As far as AWE being DLC, it's considered canon afaik.
But hey like I said I'm just going by the Wikipedia article and TV Tropes mentioning it too.
