“Q: But what is a dream?
A: That depends on the meaning of the term. You may “dream”, or, as we say, sleep visions, awake or asleep. If the Astral Light is collected in a cup or metal vessel by will-power, and the eyes fixed on some point in it with a strong will to see, a waking vision or “dream” is the result, if the person is at all sensitive.
The reflections in the Astral Light are seen better with closed eyes, and, in sleep, still more distinctly. From a lucid state, visions become trans-lucid; from normal organic consciousness it rises to a transcendental state of consciousness.
Q: To what causes are dreams chiefly due?
A: There are many kinds of dreams, as we all know. Leaving the “digestion dream” aside, there are brain dreams and memory dreams, mechanical and conscious visions. Dreams of warning and premonition require the active cooperation of the inner Ego. They are also often due to the conscious or unconscious cooperation of the brains of two living persons, or of their two Egos.
Q: What is it that dreams then?
A: Generally the physical brain of the personal Ego, the seat of memory, radiating and throwing off sparks like the dying embers of a fire.
The memory of the Sleeper is like an Aeolian seven stringed harp; and his state of mind may be compared to the wind that sweeps over the chords. The corresponding string of the harp will respond to that one of the seven states of mental activity in which the sleeper was before falling asleep. If it is a gentle breeze the harp will be affected but little; if a hurricane, the vibrations will be proportionately powerful.
If the personal Ego is in touch with its higher principles and the veils of the higher planes are drawn aside, all is well; if on the contrary it is of materialistic animal nature, there would be probably no dreams; or if the memory by chance catch the breath of a “wind’ from a higher plane, seeing that it will be impressed through the sensory ganglia of the cerebellum, and not by the direct agency of the spiritual Ego, it will receive pictures and sounds so distorted and inharmonious that even a Devachanic vision would appear a nightmare or grotesque caricature.
Therefore there is no simple answer to the question “What is it that dreams?” for it depends entirely on each individual what principle will be the chief motor in dreams, and whether they will be remembered or forgotten.”
H. P. Blavatsky
The Mark Of God: Understanding Your "I AM Presence" 