First, let’s start by answering a basic question –  What is a dream?
 A dream can include any of the images, thoughts and emotions that are experienced during sleep. Dreams can be extraordinarily vivid or very vague; filled with joyful emotions or frightening imagery; focused and understandable or unclear and confusing.

So why do we dream?
What purpose dreams serve?

While many theories have been proposed, no single consensus has emerged. Considering the enormous amount of time we spend in a dreaming state, the fact that researchers do not yet understand the purpose of dreams may seem baffling.    However, it is important to consider that science is still unraveling the exact purpose and function of sleep itself.  Some researchers suggest that dreams serve no  real purpose, while others believe that dreaming is essential to mental, emotional and physical well-being.

Ernest Hoffman, director of the Sleep Disorders Center at Newton Wellesley Hospital in Boston, Mass., suggests that "...a possible (though  certainly not proven) function of a dream is to be  weaving new material into the memory system in a way that both reduces emotional arousal and is adaptive in helping us cope with further trauma or stressful events."    Next, let’s learn more about some of the most  prominent dream theories.

Psychoanalytic Theory of Dreams:  Consistent with the psychoanalytic perspective,  Sigmund Freud’s theory of dreams suggested that dreams were a representation of unconscious desires, thoughts and motivations. According to Freud’s psychoanalytic view of personality, people are driven by aggressive and sexual instincts that are repressed from conscious awareness.  While these thoughts are not consciously expressed, Freud suggested that they find their way into our awareness via dreams.

In his famous book The Interpretation of Dreams,  Freud wrote that dreams are "...disguised  fulfillments of repressed wishes." He also described two different components of dreams: manifest content and latent content.  Manifest content is made up of the actual images, thoughts and content contained within the dream, while the latent content represents the hidden psychological meaning of the dream.  Freud’s theory contributed to the popularity of  dream interpretation, which remains popular today.  However, research has failed to demonstrate that  the manifest content disguises the real psychological significance of a dream.

Activation- Synthesis Model of Dreaming:  The activation-synthesis model of dreaming was  first proposed by J. Allan Hobson and Robert  McClarley in 1977. According to this theory, circuits in the brain become activated during REM sleep which causes areas of the limbic system involved in emotions, sensations and memories, including the amygdala and hippocampus, to become active.
The brain synthesizes and interprets this internal activity and attempts to find meaning in these signals, which results in dreaming.  This model suggests that dreams are a subjective interpretation of signals generated by the brain during sleep.
While this theory suggests that dreams are the  result of internally generated signals, Hobson does not believe that dreams are meaningless. Instead, he suggests that dreaming is "…our most creative conscious state, one in which the chaotic, spontaneous recombination of cognitive elements produces novel configurations of information: new ideas. While many or even most of these ideas may be nonsensical, if even a few of its fanciful products are truly useful, our dream time will not have been wasted."

Information-Processing Theories:  One of the major theories to explain why we sleep is that sleep allows us to consolidate and process all of the information that we have collected during the previous day.  Some dream experts suggest that dreaming is simply a by product or even an active part of this information-processing.
As we deal with the multitude of information and memories from the daytime, our sleeping minds create images, impressions, and narratives to manage all of the activity going on inside our heads as we slumber.

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