A dream is defined as a subconscious firing of neurons in sleep: interconnected patterns in a neural network acting together to produce a surreal feeling, separate from reality and uncanny at the same time.
Some people remember their dreams. Others forget them. You may remember one dream vividly and forget others the second you wake, with them living only moments in your head as you open your eyes.
Why They Feel Familiar
The reason dreams may seem so familiar is because they are innately us. Our own thoughts in the subconscious reaching toward the surface and then fading out, as their connection to the waking world is limited. Dreams are, each to us, parts of ourselves hidden deep below.
Dreams most frequently occur during the deepest part of the sleep cycle known as REM sleep, or rapid eye movement sleep. In personal experience, and in accounts from others, melatonin supplements have produced more vivid and lifelike dreams that are easier to recall. This may be a consequence of the neurotransmitter allowing the body to enter deeper sleep, permitting more REM sleep to occur and for longer, thereby allowing the dream to continue.
Memory and Consolidation
Another possible reason for dreaming, in theory, may be the consolidation of information learned while awake. Sleep and memory are correlated with positive brain function. Dreams can be a way for the brain to reorganize neural networks and structure them in a way that is coherent and efficient.
Why We Lose Them
Remembering old dreams is difficult. Many pieces are lost in translation over time. Pieces get removed, slowly replaced by another that fits the mold, gradually causing a shift in perception of what the original was, not unlike how collective memory reshapes the past.
The fade is not failure. It may be the mind's way of keeping what matters and releasing what does not.