In No Place Like Home we see the monks desperately trying to keep ahead of The Beast for long enough to perform the ritual that will transform The Key into its later form. Here is the caption seen in that episode just as they are closing a large door that might slow The Beast for a moment (it doesn't).
I suspected on seeing it that Two Months Ago was intended as a joke given the very medieval appearance of the monks and monastery (note the candle based chandeliers in the background). The film makers could've used the same set & costumes as seen in the ritual that confined Moloch to a book - which occurred some centuries ago.
OTOH it is a strong indication that whatever they did was purely memories. If the ritual changed reality, they would not have the key 'two months ago' and the entire attack would've been pointless. The moment the ritual succeeded, The Beast would have been transported to the place and circumstance that it was in, if it had not suspected the monks were holding it, which would be the case in the altered reality.
The Beast presumably kills two of the 3 monks and the 3rd escapes to America to warn The Slayer. But The Beast pursues him relentlessly, still thinking he may be of value in locating The Key.
In America, The Beast catches him & is torturing him for information. Buffy arrives and after an unsuccessful fight, cuts her losses and escapes with the monk. The Monk collapses awkwardly against a wall & they have this conversation:
M: "My journey is done, I think"
B: "Don't get metaphory on me, we're going.."
M: "..you have to.. the key, you must protect the key.."
B: "Fine, we can protect the key together OK? Just (glances over her shoulder) ..far, far from here"
M: "..many will die if you don't keep it safe"
B: "How? What is it?"
M: "The key is energy, it's a portal, it opens the door"
B: "The ..the Dagon Sphere?"
M: "No, for centuries it had no form at all, my brethren its only keepers. Then The Abomination
found us. We had to hide the key. Gave it form, molded it flesh, made it human and sent it to ..you."
B: (stunned) "..Dawn?"
M: "She is the key"
B: (getting angry) "You put that in my house?"
M: "We knew the Slayer would protect.."
B: "My memories, my mum's..?"
M: "We built them"
B: "Then unbuild them! This is my life you're.."
M: (choking and coughing) "You cannot abandon.."
B: "I didn't ask for this. I don't even know ..what is she?"
M: "Human, now human. ..And helpless. Please, she is an innocent in this. She needs you."
B: "She's not my sister.."
M: "She doesn't ..know that." (dies)
Willow alludes to this again in a conversation with Tara as they are laying a protection spell around the Magic Box. Dawn passes by and wants to help, but they fob her off and she goes into the shop. Tara says something like "It's hard to think of her not being real", Willow responds "She's real, just ..new".