The Freudian theory of dreaming states that dreams reveal hidden desires located in the subconscious mind. According to this theory, dreams are useful in the therapeutic setting because they offer clues as to the individual's true wishes, emotions and desires. A person may not be consciously aware of desires that surface during dreams - perhaps because such desires are immoral or socially unacceptable. The Freudian theory of dreaming interprets dreams as encoded messages from the subconscious mind that, through expert analysis, can be "decoded."
In contrast, activation synthesis theory claims that the nature of dreams is essentially random and chaotic. According to this theory, the brain generates random nerve impulses during sleep. These impulses result in rapid eye movement during the deepest phase of sleep. The impulses also result in randomly generated visual, auditory and emotional stimulus. We experience this random stimulus as a dream. This model even resists the idea of dreams having a psychological component thus is not part of a psychological school of thought or theory.