Although we might have fantastical dreams of flying, or getting pleasantly lost in a land called Oz, these resplendent reveries really are not as abstract as one might think. Famed psychologist Carl Jung believed that even our most fanciful dreams are methods of compensation for events that occur in our waking lives. For example, a person who experiences unhappiness in their waking life may have fantastically blissful dreams as compensation, so their spirits won't plummet into complete despair. On the other hand, a person who is largely successful may also have dreams of failure or defeat to compensate for feelings of invincibility and power.
Jung also suggests that dreams may also reflect underdeveloped parts of our personalities. This may explain the reason why the dream behavior of some people is markedly different from the actions and conditions in their waking lives.