Are dreams good or bad?

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Accepted answer

Venerable K. Sri Dhammananda Maha Thera:

According to Buddhist psychology dreams are ideational processes which occur as activities of the mind.

And:

Dreams are mind-created phenomena and they are activities of the mind. All human beings dream, although some people cannot remember. Buddhism teaches that some dreams have psychological significance.

Finally:

The significance and the cause of dreams were the subject of discussion in the famous book 'Milinda Panha' or 'The Questions of King Milinda', in which Ven. Nagasena has stated that there are six causes of dreams, three of them being organic, wind, bile and phlegm. The fourth is due to the intervention of supernatural forces, fifth, revival of past experience and sixth, the influence of future events. It is categorically stated that dreams occur only in light slumber which is said to be like the sleep of the monkey. Of the six causes given Ven. Nagasena has stated positively that the last, namely prophetic dreams are the only important ones and the others are relatively insignificant.

The full text on Ven. Thera's explanation of dreams and their significance is available at http://www.budsas.org/ebud/whatbudbeliev/321.htm.

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