Sleep, Memory

From A Cognitive Theory of Dreams by Calvin S. Hall:

A dream is a succession of
images, predominantly visual in quality, which are experienced during
sleep. A dream commonly has one or more scenes, several characters in
addition to the dreamer, and a sequence of actions and interactions
usually involving the dreamer. It resembles a motion picture or
dramatic production in which the dreamer is a participant-observer.
Although a dream is an hallucination, the dreamer experiences it as
he does any perceptual phenomenon. Scenes, people, objects, and
actions are experienced as though they were impressing themselves on
the senses from the external world. The world of dreams, it goes
without saying, is a world of pure projection.

The principal thesis of this paper is that these images of a
dream are the embodiment of thoughts. They are a medium by which a
psychological process, cognition, is transformed into a form that can
be perceived.
Although images are the only means by which ideas find
sensible expression in dreams, other media such as words, numbers,
gestures, and pictures are employed in waking life for making one’s
thoughts known. When thought is made perceptible, it is said to be
communicated. Unlike the communications of waking life, which may
have an audience of millions, the audience of a dream consists of
only one person, the dreamer himself. A dream is a highly private
showing of the dreamer’s thoughts.

Hall, C. S. (1953). A cognitive theory of dreams. The Journal of General Psychology, 49, 273-282.  Abridged version in M. F. DeMartino (Ed.). (1959). Dreams and Personality Dynamics (pp. 123-134). Springfield, IL: Charles C. Thomas.