Dreams are the unconscious uses a special language of pictures and symbols. A dream is a (disguised) fulfilment of a (suppressed or repressed) wish.
Significance of dreams
There is a persisting repressed wish, which forms the motive behind the dream. In the course of the day, this wish comes into contact, or forms an association, with a thought or train of thoughts. This thought has some "energy" attached to it (we have some emotional importance invested in it). The result is that the thought, or an association to it, is revived in sleep, as the proxy of the wish.
1. Dreams have meaning; they are phenomena with intentional content.
2. The meaning of dreams (except in the case of children) is usually not obvious. What we remember is itself a representation of the "manifest" (plot) content; and the "manifest" content is already a substitute for the latent content, that is, what our unconscious really intended the plot to mean.
3. The real meaning of dreams is concealed from the person himself because the unconscious content of dreams expresses socially unacceptable wishes -- incestuous or murderous wishes, which would shock one's superego, among others. During sleep the superego is resting, and therefore is off guard.
4. Dreams, therefore, occur in a code, metaphorical language. This code allows for the "hallucinatory" satisfaction of our unconscious wishes. If we didn't get this satisfaction, our waking life would be too repressed, and we would be really neurotic. We would bring our nonsense into our waking world.
5. Since dreams are in code that even the dreamer doesn't understand, we need special techniques to get at the meaning. "Free association", that is, letting the person say whatever comes to mind, is the best method because it allows the dreamer to call up new substitutes for the "manifest" content which is itself already a substitute for the "latent" content. We know we are at the real meaning when either the freely associated thoughts begin to tell a coherent story, or when the dreamer recognizes that they have hit on the meaning.