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For centuries, experts are trying to find the actual purpose of dreams, but still no one has any concrete answer.

One theory proposed by Sigmund Freud states that we dream to fulfil our wishes. Dreams are a representation of our unconscious desires, thoughts, etc. Each image in a dream has some meaning. As these thoughts are not expressed consciously, they find their way via dreams.

Another theory called Threat Stimulation suggests that dreams should be seen as a defense mechanism. For example, nightmares put us in threatening situations, allowing us to practice our fight or flight response which can be helpful in real life events.

A theory called ActivationSynthesis suggests that dreams don't mean anything. During REM stage of sleep, certain circuits in the brain get activated. When the brain tries to synthesize and make sense of these signals, it results in dreams.