Paradoxically, the father tells his son that having bad dreams is a good sign because it means that you still want to live. By the same token, good dreams are bad because they represent a calling to death. The father's dreams have recently started revolving around his deceased relatives. They're peaceful dreams, but the father interprets them as bad because they point towards his own death.
As for the boy, his dreams have become pretty scary of late. For some reason, he sees images of charred, twisted corpses when he goes to sleep. That being the case, he doesn't see the point of his father preventing him from seeing dead bodies, hideously mummified into the pitch black asphalt.
This particular episode is crucial as it shows the father getting gradually weaker and less able to protect his son from harm. The father takes his role as his son's protector very seriously indeed, but due to his decline in health is unable to continue to protect him. His dreams indicate that he is nearer death than his son, who seems, in some respects, to be better able to deal with the privations of this long, hard journey through a post-apocalyptic landscape.
Further Reading