Freud believed that the function of dreams is to preserve sleep by representing as fulfilled wishes that would otherwise awaken the dreamer.

In Freud's theory dreams are instigated by the daily occurrences and thoughts of everyday life. In what Freud called the "dream-work", these "secondary process" thoughts ("word presentations"), governed by the rules of language and the reality principle, become subject to the "primary process" of unconscious thought ("thing presentations") governed by the pleasure principle, wish gratification and the repressed sexual scenarios of childhood. Because of the disturbing nature of the latter and other repressed thoughts and desires which may have become linked to them, the dream-work operates a censorship function, disguising by distortion, displacement and condensation the repressed thoughts so as to preserve sleep.