The Activation-Synthesis Theory

For a while people accepted the theories of dreams created by Sigmund Freud but J. Allan Hobson and Robert McCarley challenged his ideas.  Their discoveries lead them to develop the Activation Synthesis Theory.  In 1976, they created a new theory that put a new interpretation of dreams.  They proposed that being in the state of REM sleep generates sensory information (Nielsen).  They discovered that circuits in the brainstem are activated during REM sleep.

The Activation Synthesis theory distinguishes between being asleep and being asleep in a state of mind.  Sleeping is just the unconsciousness and being unaware of the outside world and brain would receive and interpret signals are deactivated during this time.  

On the other hand, when dreaming, the brain is consciously aware of the surroundings, emotions and perception are present suggesting that part of the primary consciousness is activated when dreaming.