The interior monologue is a technique for narration that was first used in Les Lauriers sont coupés by Édouard Dujardin in 1887. It is a compilation of thoughts and memories, wishes, ideas, and assumptions that the character has reunited throughout the different events of his or her life. The thoughts are very rational, and the thoughts occur in order and with more organization than in the stream of consciousness. The idea behind the interior monologue is to dramatize a conflict using thoughts.
Stream of consciousness is not the same as interior monologue. Stream of consciousness is a combination of thoughts and reactions presented as a flow of thoughts, and not in the organized and rational way that the interior monologue occurs. The term was first coined by William James in the thesis"The Principles of Psychology". As such, the stream is more of a manifestation of what is going on inside our minds much more than an attempt at analyzing facts. It is literally described as follows:
"It is nothing joined..it flows. A 'river' or a 'stream' is the metaphors by which it is most naturally described. In talking of it hereafter let's call it the tream of thought, consciousness, or subjective life"
In contrast to the inner monologue, the character will wax compelled and reactive to a series of disjointed thoughts and memories that cause deep emotion. The onset of these emotional memories can occur at any moment, and the rules of grammar do not apply. There is no need for rationalization or organization. Think "The Jilting of Granny Weatherall".
Free, indirect discourse is a third person narrative where the third person embodies the thoughts and emotions of the main character. This omniscient subjective narrator gets in and out of the consciousness of the character who is having the epiphany.The narrative, being third person, is not directed at anyone in particular; it is sort of thrown to the air. Yet, all the thoughts and emotions are expressed exactly as the character is supposed t be feeling them. According to Pascal (1977), it is a 'dual voice' where a third person narrator and the main character's focal point of view combine.