J Allan Hobson, has never shied form making bold departures from existing trends when it comes to dream research. At the time when Freudian notions of dream interpretation and dreams-as wish-fulfillment were at it speak, he proposed a theory that dreaming or the subjective state be distinguished from the underlying REM sleep physiological brain state and that dreaming or subjective experience thereof may be an epiphenomenon associated with the underlying physiology. In other words REM sleep may have a function, but the dream state accompanying it is just an epiphenomenon- our minds trying to make sense of random internally generated signals, in the absence of signals from the external world.
In between Hobson has written a book titled Dreaming as Delirium, in which he compares dream state to that of the psychotic state, especially the delirium accompanying such psychotic states. while dream sttes are naturally cut-off from reality ( no sense inputs or motor outputs) , psychosis, that is indeed characterized by lack of contact with reality, may also thus be predominantly internally generated and close to the dream state in its characterization.
In his most recent review paper in Nature reviews Neuroscience , he compares the dream state to that of proto consciousness. As per him, proto consciousness is made up of raw emotions and perceptions while secondary consciousness is made up of awareness about perceptions and emotions and meta cognitive processes. He now endows dreams/REM state with some functional significance. He believes that dreams provide and opportunity for inbuilt genetic scripts and schema to be played out and fine tuned against external real-world scenarios. In this view dreams would still be significant as they provide a window to out internal scripts that are present from birth. He doesn’t put this across in so many words and this is my interpretation, but that is what I could sort of intuit. You are encouraged to read the original paper which is relatively much more accessible as compared to his 1977 paper.
While some people even deny any function to consciousness and call it an epiphenomenon, and thus it would be very hard to convince them of any significance to the bizarreness of dreams; yet I believe that Dreams , not of the garden variety type, but those that we ourselves consider significant, do have a significance and are not mere epiphenomenon. It may be akin to everyday consciousness not having any major role than that of post-hoc narrative weaving; but at some time free will does assert itself and conscious will rules at some rare occasions. So not all dreams are created equal, some indeed are more than epiphenomenon. They may be delirium like in nature but perhaps tend towards more of hyper consciousness than proto consciousness.
Hat tip: Neuroskeptic
Hobson, J. (2009). REM sleep and dreaming: towards a theory of protoconsciousness Nature Reviews Neuroscience, 10 (11), 803-813 DOI: 10.1038/nrn2716