This is based partly on experience and partly on my understanding of the expressions of Buddhist Masters - I'm not trying to pass myself off as 'fully enlightened' or anything.
The Middle Way of Buddha is about freedom - internal freedom:
By virtue of being linguistic and conceptual expressions of actuality which is ultimately inexpressable, the Buddhist teachings contain many hazards, which we can imagine as holes that we can get trapped in. Understanding Buddhism is like eating food without touching it. People get trapped in these conceptual holes when they reify concepts - when they regard an idea as a real entity or as an independent essence. A Buddha on the other hand moves freely - even into these holes - but is not impeded.
When Buddhism began people believed in that all things had an inherent independent nature - things had an essence that made them what they are, people had an atman, which passed from one life to another, even the universe had an Atman - which some regarded to be Brahma. Buddha saw this as a delusional view which he called Eternalism and taught Anatta and Anatman. Unfortunately some interpreted this teaching as a teaching of 'no-self' as opposed to a simple refutation of Eternalism. They thought he was teaching that reality consists of 'other' or that self does not exist in any way whatsoever or that there is a temporary self that arises from the physical body, which becomes non-existent when we die - people were reifying no-self. So Buddha taught the Middle Way between Eternalism and Nihilism to encourage people to avoid both of these conceptual traps. So Anatta and the Middle Way were taught like this for a long time after Buddha died. However, in order to discourage people from reifying self, Buddha, impermanence and any number of Buddhist concepts, the philosophy used to describe the Middle Way was generally one of negation and, combined with Anatta, people continued mistakenly to interpret Buddhism nihilistically.
So a new teaching was introduced - a way of expressing this Middle Way in positive terms - Buddha Nature. According to the Nirvana Sutra this was Buddha's final teaching. There is no evidence of it before the Nirvana Sutra was written (just before the time Jesus was born as far as I recall) and I don't know if that account is true or not - however I do see it as a valid teaching method. In a sense it comes full circle, since it resembles the Vedic Atman teaching, however, to take it literally as an inherent, independent essence or entity is to fall into or remain in a trap.
All 'dharmas' (truths, realities) are nominal, not inherent enities that exist independently of other entities or of mind.
'Atta' (self) is not an independent inherent entity - atman means an inherent independent self, so that is all that is meant by anatman
'Anatta' is not a quality that is possessed by the universe. There is no non-self, there is no 'other than me'. The distinction between self/nonself is mentally produced.
'Nirvana' is not a place.
'A person' is not really an independent entity or essence.
'The void' is not a place, nor is it nothingness.
'Sunyata' (emptiness) is not really a property, essence or entity.
'The Middle Way' is not really a path which exists only 'in the middle'
'Consciousness' is not really an entity or an essence
And 'Buddha Nature' is not really a being which is inside of the ordinary mind. Buddha Nature is the the ordinary mind - seen clearly.
All of these things may be treated, conceptually and linguistically as if they were intact, distict entities, but actually they are not. Even Buddhist masters have to act in this way according to convention in order to conceptualise and communicate. The important thing is not to beleive in the absolute existence of these entities. All entities have merely a provisional existence. Even Buddhahood.
Buddhism is not based on metaphysical speculation but on observation of phenomenal reality - that which actually exists.
Buddhism is about non-duality - not just as a method imbedded within a scheme which is itself dualistic, not as a method to travel from Samsara to Nirvana - but as a realisation of the true nature of how things actually are, in the first place. Neither self not non-self, neither Buddha Nature nor no Buddha Nature. The non-duality of Buddhahood is not an entity, it is not something which exists in any way distinctly from ordinary existence (we make the distinction); it is not something that comes into being and not something that dies, it is neither self nor nonself, neither negation nor affirmation, it is the way things actually are already.
Buddhahood is acheived by recognising that one's self (or more accurately the distinction between self and other) is provisional and conventional. To realise that the duality between self and nonself is constructed is to realise that all things are inseparable from self-nature ('all is self') and to realise that there is no self('all is nonself') simultaneously. Traces of self/nonself may remain in the realisation or in the articulation of course which is why enlightenment may appear coloured one way or the other. Enlightenment is complete when this subtle 'framing' of reality disappears - when not a trace of anatta or self or Buddha Nature or even Enlightenment remains. In theistic terms it is the simultaneous death and realisation of God (Brahma, whatever); the one and the all are the same; the ultimate distinction betwen subject and object collapses. Yet everything is ordinary, as it always was.
That's my understanding anyway. This is Mumon's comment on Joshu's Dog:
To realize Zen one has to pass through the barrier of the patriarchs. Enlightenment always comes after the road to thinking is blocked. If you do not pass the barrier of the patriarchs or if your thinking road is not blocked, whatever you think, whatever you do, is like a tangling ghost.
You may ask: What is a barrier of a patriarch? This one word, Mu, is it. This is the barrier of Zen. If you pass through it you will see Joshu face to face. Then you can work hand in hand with the whole line of patriarchs. Is this not a pleasant thing to do?
If you want to pass this barrier, you must work through every bone in your body, through every pore in your skin, filled with this question: What is Mu? and carry it day and night. Do not believe it is the common negative symbol meaning nothing. It is not nothingness, the opposite of existence. If you really want to pass this barrier, you should feel like drinking a hot iron ball that you can neither swallow nor spit out.
Then your previous lesser knowledge disappears. As a fruit ripening in season, you subjectivity and objectivity naturally become one. It is like a dumb man who has had a dream. He knows about it but he cannot tell it. When he enters this condition his ego-shell is crushed and he can shake the heaven and move the earth. He is like a great warrior with a sharp sword. If a Buddha stands in his way, he will cut him down; if a patriarch offers him any obstacle, he will kill him; and he will be free in his way of birth and death. He can enter any world as if it were his own playground.
I will tell you how to do this with this koan: Just concentrate your whole energy into this Mu, and do not allow any discontinuation. When you enter this Mu and there is no discontinuation, your attainment will be as a candle burning and illuminating the whole universe.
Has a dog Buddha-nature?
This is the most serious question of all.
If you say yes or no,
You lose your own Buddha-nature."
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