Dreams are played in the sub-conscious

Mind is commonly divided into three parts: conscious, sub-conscious, unconscious. Carl Jung writes extensively about the Unconscious which he characterizes as a portion of Reality where commonalities appear. He called these Archetypes or common themes appearing without regard to race or culture or locality. Ancient Indian and Chinese Philosophy also agree on this point while using different terminology.

It is said that dreaming occurs in the subconscious where the conscious mind has no control over. Furthermore, the unconscious sometimes reaches out into the subconscious as in the case of prophetic dreams. It is not only in dreaming that this can happen. The repository of all knowledge, the Unconscious sometimes in ordnary people but more often in highly evolved individuals, leaks into the subconscioius often in dreams and sometimes in waking visions and portray events yet to come.

Lucid dreaming is a method where the consious mind is made to observe and possibly participate in the dreaming process. Meditation on the other hand, is the conscious effort to tread into the subconscious while fully aware and conscious, and attempt to cross the bridge into the unconscious while fully in control of one's senses. It is as though the mind were reaching out to the Divine mind. This is called Sadhana in Sanskrit and Kung Fu in Chinese.