Among Freud’s earliest writings was The Interpretation of Dreams (1899), in which he insisted that dreams are “the royal road to knowledge of activities of the unconscious mind”—in other words, that dreams offer a means of understanding waking experience. He held this theory throughout his career, even mentioning it in his last published statement on dreams, printed about one year before his death. He also offered a theoretical explanation for the bizarre nature of dreams, invented a system for their interpretation, and elaborated on their curative potential.

Freud theorized that thinking during sleep tends to be primitive and regressive. Repressed wishes, particularly those associated with sex and hostility, were said to be released in dreams when the inhibitory demands of wakefulness diminished. The content of the dream was said to derive from such stimuli as urinary pressure in the bladder, traces of experiences from the previous day (day residues), and associated infantile memories. The specific dream details were called their manifest content; the presumably repressed wishes being expressed were called the latent content. Freud suggested that the dreamer kept himself from waking and avoided unpleasant awareness of repressed wishes by disguising them as bizarre manifest content in an effort called dreamwork. He held that impulses one fails to satisfy when awake are expressed in dreams as sensory images and scenes. In dreaming, Freud believed:

All of the linguistic instruments…of subtle thought are dropped…and abstract terms are taken back to the concrete.… The copious employment of symbols…for representing certain objects and processes is in harmony (with) the regression of the mental apparatus and the demands of censorship.

Freud submitted that one aspect of manifest content could come to represent a number of latent elements (and vice versa) through a process called condensation. Further displacement of emotional attitudes toward one object or person theoretically could be displaced in dreaming to another object or person or not appear in the dream at all. Freud further observed a process called secondary elaboration, which occurs when people wake and try to remember dreams. They may recall inaccurately in a process of elaboration and rationalization and provide “the dream, a smooth facade, (or by omission) display rents and cracks.” This waking activity he called “secondary revision.”

In seeking the latent meaning of a dream, Freud advised the individual to associate freely about it. Dreams thus represented another source of free association in psychoanalysis. From listening to the associations, the analyst was supposed to determine what the dream represented, in part through an understanding of the personal needs of the dreamer. Using this information, the analyst could help the patient overcome inhibitions that were identified through dreamwork. (See Sigmund Freud: The interpretation of dreams

Unlike Freud, Carl Jung (1875–1961) did not view dreams as complementary to waking mental life with respect to specific instinctual impulses. Jung believed that dreams were instead compensatory, that they balanced whatever elements of character were underrepresented in the way people live their lives. Dreaming, to Jung, represented a continuous 24-hour flow of mental activity that would surface in sleep under conducive conditions but could also affect waking life when one’s behaviour denied important elements of one’s true personality.

In Jung’s view, then, dreams are constructed not to conceal or disguise forbidden wishes but to bring the underattended areas to attention. This function is carried out unconsciously in sleep when people are living emotionally well-balanced lives. If this is not the case, there may be first bad moods and then symptoms in waking. Then and only then do dreams need to be interpreted. This is best done not with a single dream and multiple free associations but with a series of dreams so that the repetitive elements become apparent.