Can a report be created using multiple datasets?

No, a report can only be based on one data set.  

A data set is one complete data model, with relationships between the tables in the model.  A model also often contains measures covering multiple tables, etc.  

(A report spanning multiple datasets would be limited since no relationships would exist between tables in different models).

A data set can however contain multiple queries, i.e. can be based on multiple data sources.

Chris