What makes the dream world seem so real?

[Cicero]

So I had a dream I was trying to hide something from my parents, I literally thought if they found out I would be in trouble. I thought it was real life. How and why does our brain create dreams? Why do we think it's so real?

[rockNroll]

Dreams are projections of the subconscious, they tell us things we're afraid to tell ourselves, the only problem is you have to decode them first. I think the concept of dreaming is really cool, sucks I can never remember mine by the time I wake up.

[Maxxie]

Dreams are projections of the subconscious, they tell us things we're afraid to tell ourselves, the only problem is you have to decode them first. I think the concept of dreaming is really cool, sucks I can never remember mine by the time I wake up.

Projections? No.

Subconscious? Maybe.

We observe dreams because its basically unfiltered neurological activity. Picture this: a waterfall, with an accompanying lake, forest, and animals. Got it? The human ability to imagine things based on past experience is what allows a dreamspace to be constructed. Now, I don't know the details, but I would say that dreams are a result of random hippocampal and amygdalic activity, as well as other cortical brain function. The ideas produced by this random activity are then taken in by the sensory functions (your five basic senses).

You're seeing this computer screen right now as the result of neurons and glia and other brain cells registering and processing data from your retinas and whatnot. You believe it to be reality because you are observing it. Enter sleepmode - a brain state of low function and repair - and instead of those sensory functions getting information from the retinas. they're getting information from the memory and imagination centres. It seems just as real because we're processing the data the same, the input source is simply different.

Tl;dr: Go back and read the fucking thing. I wrote this to make myself look smart. That being said... Brain processes data in observation, when dreaming those observations have different sources than when you're awake (brain instead of reality), we still believe our processing to be correct.