In The Alchemist, dreams are central to the narrative and serve as a guiding force for the protagonist, Santiago. The novel explores the importance of pursuing one's dreams, or Personal Legend, as a path to self-discovery and fulfillment. Dreams are depicted as a form of communication with the Soul of the World, propelling Santiago on a journey that transforms his understanding of life and his place within it.

Santiago's journey begins with a recurring dream about a treasure located at the foot of the Egyptian pyramids. This dream acts as a catalyst for his quest, symbolizing his Personal Legend. The dream's vivid imagery, describing a "chest of Spanish gold coins" and "precious stones," captures Santiago's initial desire for material wealth. However, as Santiago progresses, the dream evolves to represent the wisdom and personal growth he gains through his experiences. The treasure, initially a symbol of wealth, ultimately signifies the knowledge and enlightenment Santiago acquires, underscoring the novel's message that the true value of dreams lies in the journey itself.

The novel also emphasizes the significance of interpreting dreams and omens. Santiago's encounter with the gypsy woman highlights the complexity of understanding dreams, as she explains, "It's the simple things in life that are the most extraordinary; only wise men are able to understand them." This notion suggests that dreams, while seemingly straightforward, require wisdom and introspection to fully grasp their meaning. Santiago's ability to interpret dreams and omens becomes crucial in his quest, guiding him toward his destiny and reinforcing the idea that dreams are a vital connection to the Soul of the World.

Throughout the story, Coelho contrasts believers in dreams with nonbelievers. Believers, like Santiago and the chieftain who heeds his dream about the hawks, are portrayed as enlightened individuals who understand the importance of following one's dreams. This belief aligns with the biblical story of Joseph, who also interpreted dreams and found success. Santiago's journey illustrates that pursuing one's dreams, despite challenges, leads to personal growth and fulfillment, reinforcing the theme that dreams are essential to achieving one's Personal Legend.

Santiago's father provides a contrasting perspective on dreams and travel. He observes that travelers often return unchanged, suggesting that mere travel without purpose does not lead to personal transformation. Santiago, however, chooses to become a shepherd, using his travels as a means to pursue his dreams. This decision highlights Santiago's determination to be a different kind of traveler, one who seeks to realize his dreams and achieve his Personal Legend. Through Santiago's journey, Coelho conveys that dreams are not just aspirations but a guiding force that shapes one's life and destiny.