In 1924 Edgar Cayce was asked while in trance: "What is a dream?".
He replied:

"There are many various kinds of manifestations that come to an animate object, or being; that is in the physical plane of man, which the human family term a DREAM.

"Some are produced by suggestions as reach the consciousness of the physical, through the various forms and manners as these.

"When the physical has laid aside the conscious in that region called sleep, or slumber, when those forces through which the spirit and soul has manifested itself come, and are reenacted before or through or by this soul and spirit force, when such an action is of such a nature as to make or bring back impressions to the conscious mind in the earth or material plane, it is termed a dream.

"This may be enacted by those forces that are taken into the system, and in the action of digestion that takes place under the guidance of subconscious forces, become a part of that force through which the spirit and soul of that entity passed at such time. Such manifestations are termed or called nightmares, or the abnormal manifestations on the physical plane of these forces.

"In the normal force of dreams are enacted those forces that may be the fore-shadow of condition, with the comparison by soul and spirit forces of the condition in VARIOUS SPHERES through which this soul and spirit of the given entity has passed in its evolution to the present sphere. In this age, at present, 1923, there is not sufficient credence given dreams; for the best development of the human family is to give the greater increase in knowledge of the subconscious, soul or spirit world. This is a DREAM."

During the same 'reading', he was also asked: "How should dreams be interpreted?"
He replied:

"Depending upon the physical condition of the entity and that which produces or brings the dream to that body's forces.

"The better definition of how the interpretation may be best is this: Correlate those Truths that are enacted in each and every dream that becomes a part of this, or the entity of the individual, and use such to the better developing, ever remembering develop means going toward the higher forces, or the Creator."

READING # 3744-4 - Dated: February 14, 1924