CBSE Class 10 Answered

There are basically two main schools of thought on why we dream - physiological theory and psychological theory.

Both theories agree that we dream during the REM, or rapid eye movement, phase of sleep. During this phase of sleep, our closed eyes dart rapidly about, our brain activity peaks, and our muscles suffer temporary paralysis.

The physiological theory centers upon how our body, specifically our brains, function during the REM phase of sleep. Proponents of this theory believe that we dream to exercise the synapses, or pathways, between brain cells, and that dreaming takes over where the active and awake brain leaves off. When awake, our brains constantly transmit and receive messages, which course through our billions of brain cells to their appropriate destinations, and keep our bodies in perpetual motion. Dreams replace this function.

Psychologically - There are many worries from work and problems unsolved that are left over from the day.  Dreams help providing spaces for yourself to obtain a calm and peaceful mind, in preparation for facing other troubles in real life.  They may also act as forerunners for any surprising incidents that one may or may or expect later on