What do buddha taught about dreams?

I'm not sure what Buddha taught about it. Here is something from my experience which might be of help.

From time to time I have a lucid dream, that is a dream in which I am conscious that I am dreaming. The more conscious I am, the more freedom of choice I have. Especially when I am motivated to ask a question to another being in the dream, I tend to 'wake up' in the dream. I've asked a couple of questions, spread over a couple of dreams. The answers provided were sometimes riddles to me for days. And suddenly a realization/epiphany struck me. Sometimes an answer was as clear as it could be right away. What these answers showed me were things nobody in waking life reality showed me, and what really helped me grow personally.

To give a concrete example. I once asked someone in the dream world what she was doing for ME. That is, I ignorantly assumed that this was MY dream world, and everything and everybody in it, was part of MY mind and so must had a purpose for ME. You can understand that that ME is ego and therefore based on illusion instead of reality. What the first dream person replied was: "I am not letting myself lead by YOU". I didn't directly understood that answer, I was more interesting in what I was looking for. So I ran of to another person. I came up from behind, took the person by the shoulders and turned her around and asked the same question. She replied with: "If you would work WITH US, than you would know."

The moment I experienced the dream it was reality, as in the pure definition of what reality is: "The quality or state of being actual or true". The experience in that moment was actual and true.

In that respect, no matter what the source is, information is always real, and therefore reality. Understand that the dichotomy of subjective and objective reality nuances it in the following aspect: When you take some subjectively created reality to be objective reality, you have an erroneous perception of reality, which is by definition an illusion.

Whatever monks supposed to do with interpreting dreams or not. I think it is always good to interpret any information from whatever source. If I would have limited myself back then to "Oh, I am not supposed to interpret my dream" I wouldn't have grown by it. Now I did and I am glad I spent time interpreting it.

So yes I do think that dreams have a link to reality. So yes, if you gain understanding from something by an experience you had in a dream, go for it I would say! Apply your newly gained knowledge, see if it works. If it does consistently, it must be very real and you should keep using that knowledge. Because only real things work.

I'm sorry that I could provide any information with respect to what Buddha taught. What I do know is that Buddha taught that when you have used a boat to cross the river, and it is no longer of use to you, you should leave it, how important that boat was to cross the river, or how much energy you spend in creating it, it is no longer of the same value once you have crossed the river (source). So don't hold on to the need to find a Dhamma about a certain subject. If you own experience is a guide to you, then go for that! Where do you think Buddha obtained his teachings from? First hand experience. So, I would say that if it works, the knowledge you gained through your own experience, it is more worth trusting that then needing to find a teaching to validate it. I am assuming here that you are looking for validation, my assumption might be wrong.Maybe you don't feel like you need it for validation, but you are just looking for supplementary information.

There is a school of Mahayana Buddhism that believes that the dream world is just as real as the waking world.

After some reflection I remembered... It's the "Mind only school" Yogachara And Here - Mind Only School

Slightly philosophical, but I hope this contributes...

According to the Prajnaparamita Sutra (over 2,000 years old) and related texts, dreams (known in sanskrit as svapna) have a classification although they are regarded as unreal. The Prajna-Paramita was allegedly practiced by all past Buddhas and Bodhisattvas and the knowledge contained therein is closely related to the knowledge-quality of the mind of a Buddha.

There are five types of dreams defined:

i) In the case of physical unbalance (kāyavaiṣamya), when the hot vapors predominate, one dreams a lot, one sees fire (tejas), yellow (pīta) and red (lohita) ;

ii) When the cold vapors predominate, one sees especially water (ap-) and white (avadāta);

iii) When the windy vapors predominate, one sees particularly flights [of birds] and black (kṛṣṇa);

iv) When one has thought a lot [during the day] and reflected well on what one has seen and heard (dṛṣṭaśruta), one sees all of that again in dream;

v) Finally, the gods send dreams to teach about future events.

These five types of dreams are all without reality; they are false visions.

(source)

Note: in order to understand the last sentence of the above quote, you should learn the context in which the discussion takes place: the unreality of the dharmas are compared to Dreams (svapna); this example forms part of a set of ten comparisons. The goal is thus to prove the emptiness of dharmas, not to invalidate the purpose of dreams.

The source link contains an interesting discussion regarding the reality of dreams. For example, one opposing argument is treated as follows:

Question. – You should not say that the dream has no reality. Why? Because every mind depends on causes and conditions (hetupratyaya) in order to be produced and, in the dream, consciousness (vijñāna) has all sorts of conditions (pratyaya). Without these conditions, how could consciousness arise?

Answer. – It’s nothing of the sort: in dream, we see something although we should not see it. We see, for example, a human head (manuṣyaśiras) with horns (viṣāṇa) or dead bodies flying through space (ākāśa). Actually, people do not have horns and dead bodies do not fly. Thus the dream has no reality.

What follows is a very interesting discussion regarding the illusion of conceptual existence but that's rather off-topic for this question.

Dreams occur through our identification in the waking life with nāma-rūpa or concept and object. Therefore, with relative reasoning dreams originate as a reflection of the cycle of samsāra which bears the component of duḥkha thus, the efforts of interpretation are futile. How so?

If identification with nāma-rūpa in the waking life leads to various degrees of discontented states that identification must also present in the interpretation of ones dreams. This would be similar to handing a user-feedback form to someone who has just punched you.

A question to contemplate quietly with yourself is: What would the motivation be for the interpretation of your dreams?

Interestingly, I hear in the enlightened state one has dreamless sleeps which goes some way to reinforcing the connection to identification with concept and object in the waking life and concept and object in the dream state.