Almost all dreams occur during REM (rapid eye movement )sleep. Scientists do not understand why dreaming is important, one theory is that the brain is either cataloging the information it acquired during the day and discarding the data it does not want, or is creating scenarios to work through situations causing emotional distress. Regardless of its function, most people who are deprived of sleep or dreams become disoriented, unable to concentrate, and may even have hallucinations.
It appears that the content of dreams is stored in short-term memory and cannot be transferred into long-term memory unless they are somehow articulated. Sleep studies show that when individuals who believe they never dream are awakened at various intervals during the night when they are in the middle of a dream.
