The correct answer is activation synthesis hypothesis
Activation Synthesis Hypothesis described dreams as a consequence of spontaneous activation of the REM phase of a primitive region of the brain: the brain stem. When the cerebral cortex, where the higher thought resides, receives this kind of random neuronal noise, it tries to convert it into something that makes sense. This is done by taking images and experiences from our personal archive. In this process of "synthesis", when the narrative of the dream appears, the tale of any story, our minds can mix up images and experiences and the results can be aberrant.
