The predominate theory explains that we dream as a means to process and organize those experiences we have during our waking hours without the influence of our ego and all the “baggage” that accompanies it. In our sleeping state, it is easier to assimilate and process the knowledge and experiences we absorb but do not fully comprehend. It also allows us to examine more carefully any details that may have slipped by. Many people believe if you take your problems to bed with you, you may be able to devise a solution while in the dream state.
Another popular theory about the characters created in our dreams are fragments of our own ego that need to be addressed and improved upon. And, better still, these people, places and creatures open up an endless supply of imagination that we can rapidly lose as we age and become adults. All that amazing knowledge and learning and imagination and freedom is there in our minds while it sleeps. Who wouldn’t want to be able to use that information to better his waking hours in the same way?

If they are so important, why do we have difficulty recalling dreams?

Mentally, as we wake, so does our ego. The ego is like software that we program to help us cope, adapt, and function in our day-to-day lives. When we wake, all attention returns to our body, our environment, and our situations. This shift in consciousness loses contact with our dreams, which are left behind in the unconscious.

Physically, the major muscle groups are stimulated (especially the larger leg muscles) and blood flow, respiration, and circulation reaches a conscious alertness. The body functions in the physical where are dreams are not present.