Since 1990 approximately I was writing on themes of metaphysics, brain, mind, psyche, etc, and of course the topic of dreams.
Now well, such as entry and synthesis of dreams I would say:

"Dreams are mechanisms of downloading or deactivation of mental circuits that during the day we have been activating with our experiences".

Now, to explain the theme of dreams and to understand them, translate them and serve us of them we have firstly to explain a little the brain mechanisms by which dreams occur.
The system of dreams is a very ancient, and at the same time, an essential mechanism of liberalization of our brain from unwanted "loads" that constantly arises to our mind.
But let's go to the structural study of dreams.

Humans, like animals, have a few devices and modes of brain work through the formation of neural circuits for the implementation of all kinds of actions necessary to our daily lives.
These circuits are managed by ancestral performance modules that are the instincts and feelings.
Every instinct and feeling induces us to act on certain aspects of our life to get what we need. So if we need to eat, the instinct of food and the feeling of hunger will lead to act to get food.

The procedure to be followed would be:
First the cells emit signals of need for food; this awakens the instinct of food and feeling of hunger, which loaded a "craving for food" which impulse the intelligent brain to organize and run the quick and easy way to get food.
Once achieved and eaten the food, the process is turned off.
But beware, it is very important to understand that the deactivation occurs through the implementation of relevant actions to obtain food, and when the vision and observation say us that the food has been achieved and engulfed.
This way the activation is a program of actions to be carried, and its deactivation is achieved by running the program.

But the process can be more ethereal, as for example if our possession instinct by means of which we want to have a beautiful car that we have seen in an exhibitor, which we never going to get it.
In this case a "circuit of action or desire" will be loaded, which will not be possible to deactivate it because we will not reach the car never.
And as we have not followed the steps to get the car, because the "desire-circuit" stays load producing several internal emotional imbalances.

Equal, if what you had suffered is a fear, for example because of the danger of being mugged, also in this case the instinct of conservation will have caused a feeling of escaping that will be recorded in our brain.
If for example we are afraid of being beaten by some assailant in any places where we walk usually, then this possible danger makes produce or record activated circuits of fear in our minds.
So I repeat that the circuits of desires and fears are automatic mechanisms of actuation (of our subconscious) programmed to resolve problems that arise continuously in our mind.
And yes, as you are guessing, dreams foundations is for deleting all these fears and desires that emerge us during the day in our daily life when they have not been executed or solved.
This way, those fears and desires which have not been satisfied or solved correctly following the order logical and practical performance, at night they are disassembled by dreams or experiences similar to which they would have make in the real and practical actuation awaked during the day.

But with a big difference, that now when we are sleeping, our intelligent brain is also sleeping and the programs of desires and fears have to be resolve by themselves without the capacity of chose the correct characters and scenes ending to be a truly and stupid cumulus of rare performance.
Therefore here I should be the great clarification that leads to understanding dreams:
In dreams the instincts and feelings that we develop are the right ones, which are latent in the activated circuits of desires and fears.

Contrarily, the scenes and characters that are implemented are totally stupid or inappropriate. Therefore never look at the characters or involved elements, but the instincts and feelings that we produce or execute.

So when we have a dream we must forget about the characters and involved scenes and look only at the feelings that we have produced because they are the feelings that plague us in reality, to which we must find the real circumstances that produce them in our real live.

I would put some examples that give us a better understanding:

Although, when being asleep our intelligence and be impossible to accede correctly to the data that it manages, the dreams choose the more simple data to its reach, and this way, to be able express its sentiments.

This way, the first that we must to do with our dreams is to study the expressed sentiments, fears and desires, and later on, to look in our real life and discovery to what our sentiments are referring.

Finally, and as third argument, we must to take in mind that these dreams are a psychical necessity that our brain and mind use for their adjust and regulation, and so, they are not noxious or disruptive, but necessary; besides we can use them to understand better our mind, and to observe the problems that subsist in our psych.

For all the above, I understand that the understanding of the characteristics and nature of dreams is essential for any psychologist, because through the studies of dreams you could understand the mental situation of each individual.

The daydreams and mental creations

Now we are going to make a brief presentation of the daydreams because it will also help us to understand a little better the dreams.
I call daydreams or mental recreation the large and creative thoughts done in vigil or awake, always and when we use the emotional instincts and sentiments and not simple works of deduction.
The daydreams or mental creations are of great importance in humans because they lead us to produce internally great experiences, creations of all kind mental productions such as novel, short stories, stories, etc. But they can also serve us as compensation or deactivation of the fears and desires which we will acquire in our daily lives.
For instance, if I have a craving on that nice car that I've seen in the exhibitor, and then I crate a large mental recreation where I'm going to buy it, use it, drive it, etc., then this desire can be disabled without having to be dreamed at night.
In this case, I made a compensatory reverie of the desire of having the car, but clear, when the smart brain stay awake, this recreation has been carried out with the elements and real characters.
I.e., it has been an intelligent recreation, while in dreams we are stupid recreations.