Different theorists have varying ideas on the matter of dreams…
Carl Jung believed that dreams represented symbols of the unconscious, while Calvin hall believed that we were able to conceptualize our waking life through dream experiences. More recently, Antti Revonsuo believes that dreaming is a function of evolution, but John Allan Hobson and Robert W. McCarley feel its simply a random firing of neurons with no significant purpose. Currently, Matthew Wilson is working diligently at MIT recording dreams of rats, in hopes of one day being to watch our dreams like we would a movie.
Further Readings (not included in my section):
Antrobus, J. (1993). Characteristics of Dreams. Encyclopedia of Sleep and Dreaming.
Hall, C. (1947) Diagnosing Personality by the Analysis of Dreams. Journal of Abnormal and Social Psychology, (42) 68-79
Hartman, E. (2006). Why do we dream? Scientific American
Hobson J. (2007) Wake up or dream on? Six questions for Turnbull and Solms. Cortex.
Hobson, J.A. (1995). Sleep. New York: Scientific American Library
Jung, C.G. (1902) The associations of normal subjects. In: Collected Works of C. G. Jung, vol. 2. Princeton, NJ: Princeton University Press, pp. 3–99
McCarley, R.W. (2007) Neurobiology of REM and NREM sleep. Sleep Med.
Revonsuo A. & Kamppinen M., (1994) Consciousness in Philosophy and Cognitive Neuroscience. Lawrence Erlbaum.
Robert, Rose (2004). “Network on Mind Body Interactions”