I had a friend who tried hard to remember more of her dreams. She’d write them down and then tell people about them. She stopped, though, because it started interfering with her social life. She'd start talking about her dreams and people would leave the room.
There are two major theories about why we dream. The first is the activation-synthesis theory, which holds that dreams are interpretations by our forebrains of essentially random activity from the spinal cord and cerebellum during sleep, especially REM sleep.
Part of the explanation for why dreams can be so weird is that they are interpreted from chaotic information. The evolutionarily older parts of our brains are also the seat of our basic emotions. According to this theory, the emotion comes first and dreams are made to make sense of the emotion. Evidence of this comes from scene-changes that happen: when we have anxiety dreams, for example, they often switch from one anxious situation to a different one—so rather than us feeling anxious because of the content of our dreams, it could be that our feeling is causing an anxious narrative in the dream!
The other major theory of dreaming is “threat simulation theory,” which holds that the evolutionary function of dreaming is for us to practice how to behave in threatening situations. There's a lot of evidence for this theory too.
First, most dream emotion is negative. Also, people tend to dream of ancestral threats: falling, being chased, natural disasters, and so on. These frightening elements are overrepresented in dreams—that is, we see them in dreams much more than our experience in our day-to-day world would predict. Lots of people dream of being chased by animals, but how often does this actually happen to people? The overrepresentation of animals chasing us in dreams, especially for children, suggests that we have some innate fear of them. In contrast, we don’t dream of modern threats, such as heart attacks, as much as you’d expect if dreams were based on the problems we actually face in today’s world.
These two theories of dreaming are often presented as competing, but as far as I can tell they are compatible—that is, even if dreams are interpretations of chaotic input from the spinal cord, there is still a theory needed to describe how chaotic input is elaborated into narratives that we experience as dreams, and it's quite possible that the mind takes advantage of this opportunity to practice dealing with dangerous things.
Why do we feel the urge to talk about our dreams? A suggested ramification of threat simulation theory relates to the idea that “two heads are better than one:” discussion of dreams might be adaptive if they help us mentally prepare for threats. We like to talk about dreams to help us prepare for how to act in dangerous situations in the future.
Which leads us to why we find our own dreams so interesting. There are three reasons based on known psychological effects, though all of them are speculative in terms of my application of them to dreams.
The first is negativity bias, which makes us pay attention to dangerous things.
Because most dreams are negative (support for the threat simulation theory) our bias in favor of negative information makes them feel important.
The second reason has to do with the emotional primacy of dreaming—because so many dreams are so emotional, they feel important in a way that people hearing about them, not feeling that emotion, might find hard to relate to. Once I dreamed of a terrifying staircase. When I told my girlfriend about it, she laughed at me for being scared of such a harmless thing. In the dream it was scary, but clearly my audience couldn’t appreciate that.
We tend to think of dreams as being really weird, but in truth about 80 percent of dreams depict ordinary situations.We’re just more likely to remember and talk about the strange ones. Information we don't understand can often rouse our curiosity, particularly in the presence of strong emotion. Just like someone having a psychotic experience, the emotional pull of dreams make even the strangest incongruities seem meaningful, and worthy of discussion and interpretation.
These reasons are why most of your dreams are going to seem pretty boring to most people.
But if you’re going to talk about some of your dreams, pick the ones in which you deal with a problem in some new way. The negativity bias would make them more interesting than your happy dreams, and if you feel you learned something about how to deal with a threat, maybe your audience will too.