Modern popular culture often conceives of dreams, like Freud, as expressions of the dreamer's deepest fears and desires. In films such as The Wizard of Oz (1939), Spellbound (1945), The Manchurian Candidate (1962), Field of Dreams (1989), and Inception (2010), the protagonists must extract vital clues from surreal dreams. Most dreams in popular culture are, however, not symbolic, but straightforward and realistic depictions of their dreamer's fears and desires. Dream scenes may be indistinguishable from those set in the dreamer's real world, a narrative device that undermines the dreamer's and the audience's sense of security and allows horror film protagonists, such as those of Carrie (1976), Friday the 13th (1980) or An American Werewolf in London (1981) to be suddenly attacked by dark forces while resting in seemingly safe places.

In speculative fiction, the line between dreams and reality may be blurred even more in the service of the story. Dreams may be psychically invaded or manipulated (Dreamscape, 1984; the Nightmare on Elm Street films, 1984–2010; Inception, 2010) or even come literally true (as in The Lathe of Heaven, 1971). Peter Weir's 1977 Australian film The Last Wave makes a simple and straightforward postulate about the premonitory nature of dreams (from one of his Aboriginal characters) that "... dreams are the shadow of something real". Such stories play to audiences' experiences with their own dreams, which feel as real to them.

In modern times, dreams have been seen as a connection to the unconscious. Freud's work concerns the psychological role of dreams, which does not exclude any physiological role they may have. Recent research claims that sleep has the overall role of consolidation and organization of synaptic connections formed during learning and experience. As such, Freud's work is not ruled out. Nevertheless, Freud's research has been expanded on, especially with regard to the organization and consolidation of recent memory.

REM sleep episodes and the dreams that accompany them lengthen progressively across the night, with the first episode being shortest, of approximately 10–12 minutes duration, and the second and third episodes increasing to 15–20 minutes. Dreams at the end of the night may last as long as 15 minutes, although these may be experienced as several distinct stories due to momentary arousals interrupting sleep as the night ends. Dream reports can be reported from normal subjects on 50% of the occasion when an awakening is made prior to the end of the first REM period. This rate of retrieval is increased to about 99% when awakenings are made from the last REM period of the night. This increase in the ability to recall appears related to intensification across the night in the vividness of dream imagery, colors, and emotions.

Although most dreams do take place during REM sleep, more recent research has shown that dreams can occur during any of the sleep stages. Tore A. Nielsen, Ph.D., of the Dream and Nightmare Laboratory in Montreal, refers to this as "covert REM sleep" making an appearance during NREM (Non-rapid eye movement) sleep. Most NREM dreams, however, don't have the intensity of REM dreams. It is possible to suppress or encourage dreams; taking anti-depressants, Tylenol, Advil, or alcohol is thought to potentially suppress dreams, whereas melatonin may have the ability to encourage them.

The current thinking is that dreaming is an important component of memory and that we do know that when people are learning new things, for example learning a new language, dreaming literally increases. Dreaming increases when we're learning new tasks, and if we're prevented from dreaming after we've learned something new, our memory for it is very poor. Even if we're allowed to sleep, but our dreaming is interrupted. There is a lot of evidence now that suggests dreaming is an important component of short-term memory. So, this is one possibility and perhaps one that's quite important. But, the bottom line is we truly don't know why we dream.