“Q: Is the “register” or “tablet of memory” for the true dream-state different from that of waking life?
A: Since dreams are in reality the actions of the Ego during physical sleep, they are, of course, recorded on their own plane and produce their appropriate effects on this one. But it must be always remembered that dreams in general, and as we know them, are simply our waking and hazy recollections of these facts.
It often happens, indeed, that we have no recollection of having dreamt at all, but later in the day the remembrance of the dream will suddenly flash upon us. Of this there are many causes. It is analogous to what sometimes happens to every one of us.
Often a sensation, a smell, even a casual noise, or a sound, brings instantaneously to our mind long-forgotten events, scenes and persons. Something of what was seen, done, or thought by the “night-performer”, the Ego, impressed itself at that time on the physical brain, but was not brought into the conscious, waking memory, owing to some physical condition or obstacle.
The impression is registered on the brain in its appropriate cell or nerve centre, but owing to some accidental circumstance it “hangs fire”, so to say, till something gives it the needed impulse. Then the brain slips it off immediately into the conscious memory of the waking man; for as soon as the conditions required are supplied, that particular centre starts forthwith into activity, and does the work which it had to do, but was hindered at the time from completing.
Q: How does this process take place?
A: There is a sort of conscious telegraphic communication going on incessantly, day and night, between the physical brain and the inner man.
The brain is such a complex thing, both physically and metaphysically, that it is like a tree whose bark you can remove layer by layer, each layer being different from all the others, and each having its own special work, function, and properties.”
H. P. Blavatsky
The Mark Of God: Understanding Your "I AM Presence" 