Questioner : Dada, why do we dream?

Dadashri : Those dreams are our Karmas.

Questioner : Why do we get affected by those dreams?

Dadashri : These dreams are the result of our subconscious ( Bey Deh) karmas. When subconscious karma is ready for fruition, then accordingly, we have dreams. In our conscious life, we have conscious (Three Deh) karmas, where, when the karma is ready for fruition, accordingly, we have to suffer them with our minds' and bodies. This is a very subtle matter! There is no such machine which can dream. Dreams are a projection of your Chetan, or 'Pure Consciousness'. Also, these 'Open Eyed Dreams' (worldly interactions), are the projection of your 'Pure Consciousness' or Chetan. Even in a state of deep, but dreamless sleep, it is the projection of the 'Pure Consciousness'. The reason being, that when one wakes up from very deep sleep, one says," I haven't slept this well for a very long time." The one who experiences the sleep and the one who actually sleeps are both separate.

Dreams … A Mystery April 16 Inner
The one who sleeps is not the one who says, "I haven't slept this well for a very long time." It is the one who experiences the joy of that deep sleep, that says these words, but that is also not the Atma, it is a part of the Chetan or 'Pure Consciousness'. This 'Pure Consciousness' has a connection with the permanent happiness of the atma. The part that says, "Today it was very joyful” is the one connected with permanent happiness, and not with temporary adjustments. While dreaming, all the windows of our physical body are closed. For example, eyes, ears, mouth etc. The subconscious body, the mind, the intellect, the subtle component of vision (Chit) is functioning. The Ego cannot do anything. If the Ego could function while dreaming, one would get up and start fighting with the person in the dream, or walk around, or whatever activities that have to be performed in the dream, would be enacted physically. But ego has no function in a dream, but when one is awake, it is the Ego that says, "I am the doer." Really speaking, the Ego cannot do anything in any situation but, while in the awakened state, all the physical body's windows are open, and therefore there is the illusion of doer-ship by the Ego.