Understanding dreams has long been considered fundamental to the development of a theory of consciousness. Evidence from neurobiology and neuroimaging research has paved the way for new theories of dreaming that are empirically supported. In this article we argue that dreaming is a unique state of consciousness that incorporates 3 temporal dimensions: experience of the present, processing of the past, and preparation for the future. The temporal complexity of dreams is made possible in part by the unique neurobiological environment of sleep, in which stimuli are internally generated and many of the restrictions associated with waking thought are absent. Because dream consciousness is not determined by sensory stimuli, a flexible integration of past experiences and the forging of novel connections are possible. We argue that disparate dream theories may not be mutually exclusive but rather relate to different temporal domains of the dream state.