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What is a soul? What is a spirit?
For the difference between soul and spirit, see my answer to
Jesus' Soul and Spirit?.
Omitting the relevant scriptures, a brief summary is:
Soul:
Spirit:
If humans beings are completely dead after death, how are references to "sleep" (i.e. death) understood in the Bible? If the person is dead, how can we talk about him as sleeping?
"Sleep" is simply a euphemism for death, just as today people don't "die", they "pass away" or "go to a better place".
"you will not abandon me to the realm of the dead, nor will you let your faithful one see decay"
β how can a dead person be abandoned in a realm?
The realm of the dead is a metaphor for the grave, as is evident from the reference to decay. The Hebrew and Greek words for grave are often translated as "hell", which doesn't have the supernatural meaning that is popularly attributed to it.
When someone (or any animal) dies, their body (soul) stops breathing and its animating life-force spirit returns to God. That spirit is not alive itself, so any concept of immortality is inapplicable to either the soul or the spirit.
The dead body eventually rots and disappears; the person no longer exists in any form.
God is capable of recreating that person though, either as a mortal physical body (the second resurrection) or as an immortal spirit (the first resurrection).
The question of where a person is between death and resurrection is meaningless.
Without the complications created by the pagan concept of immortal souls and the image of eternal torment in an inferno popularized by Dante's famous fantasy novel, the Biblical account becomes quite simple and easy to understand.