No one knows for certain why we dream but there are many theories in existence. Sigmund Freud believed that our dreams are a manifestation of our repressed wishes. Another theory suggests that we dream simply because our brains are attempting to make sense of external stimuli why we sleep. J. Allan Hobson would argue that dreams occur because circuits in the brain become active while we sleep in areas involved in emotion, sensations, and memory. Whatever the truth is we may not ever know for sure but our fascination will never cease.
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Dreams are just like your computer organizing storage. Your memory is not different, and needs to be compressed and archive things that are not being used. And the best time to do that is when you are sleeping, for the obvious reason, the reorg is more effective when there are very few tasks running. I am sorry for the romance stories about interpreting dreams, it is just like Astrology, fun but not real. Please let me know if additional information is needed.