The reality of dreams is commonly sought amongst human beings since it’s an experience most people go through sometime during their lives. What we understand is that in terms of interpretations, two types are commonly presented: the materialistic and spiritual.
The materialistic interpretation are commonly associated with the daily actions of human beings, i.e. whatever we may have experienced over the past few days becomes somehow embedded in our dreams. This is especially the case if before sleeping the mind is in reflection about activities that the body had undertaken during the day. Sometimes it’s also unfulfilled desires or even fears that influence dreams and their nature. Therefore many of such dreams are related to the past.
Those subscribing to the spiritual interpretation of dreams view them a result of possible delusions, inclinations, desires and imaginations. Such dreams relate to the future and people often seek interpretations. Not all such dreams have meaningful interpretations, as some are called (athgath ahlam or distressing dreams).
We know from the holy Quran that one way in which Prophets of Allah received revelation is through dreams (e.g. Prophet Ibrahim as). Indeed Prophet Yusuf (as) was given the ability by Allah (swt) to interpret the dreams. Therefore we don’t reject all dreams and dismiss them. From history books and narrations, we find that some dreams do have meaningful interpretations whilst others don’t. Another Quranic fact is that the soul departs from the body during sleep, thus some dreams are associated with the idea that the soul is not limited to time and space, as well as it belonging to the realm of malakoot (i.e. unseen realm).
The difficulty in interpreting dreams is that people often do so themselves, without seeking help of experienced and knowledgeable scholars. We know that some dreams refer to aspects in this world, for e.g. I was told by an alim that if a believer witnesses a dream of being given water to drink, it eludes to the idea that Allah ta’la is bestowing them with knowledge.