1. We only dream of people we already know.
Our minds can not discover new faces. In our dreams we see real faces, real people that we have seen during our life but do not know or do not remember them. We have all seen hundreds of thousands of faces throughout our lives, so we have an endless supply of characters our brain to utilize during our dreams.
2. We forget 90% of our Dreams
Within five minutes after you wake up half of your dream is forgotten. Within 10 minutes you forget 90%.
The recall of dreams is extremely unreliable, though it is a skill that can be trained. Dreams can usually be recalled if a person is awakened while dreaming. Women tend to have more frequent dream recall than men. Dreams that are difficult to recall may be characterized by relatively little affect, and factors such as salience, arousal, and interference play a role in dream recall. Often, a dream may be recalled upon viewing or hearing a random trigger or stimulus.
The ability to dream indeed seems to be embedded in the biology of many animals in addition to humans. Scientific research suggests that all mammals experience dreams. The range of REM can be seen across species: dolphins experience minimal REM, while humans are in the middle of the scale and the armadillo and the opossum (a marsupial) are among the most prolific dreamers, judging from their REM patterns.
A standard traditional Chinese book on dream-interpretation is the Lofty Principles of Dream Interpretation compiled in the 16th century by Chen Shiyuan (particularly the "Inner Chapters" of that opus). Chinese thinkers also raised profound ideas about dream interpretation, such as the question of how we know we are dreaming and how we know we are awake. It is written in the Chuang-tzu: "Once Chuang Chou dreamed that he was a butterfly. He fluttered about happily, quite pleased with the state that he was in, and knew nothing about Chuang Chou.