How many times have you woken from a dream so vivid that you felt as though you are still within it? How many times has a nightmare moved you to an emotional response?
It is said that dreams are an indication of the subconcious thoughts and feelings of the individual (there are plenty of books on how to interpret dreams in circulation) that are given form in the subconscious. There is also a supernatural quality to dreams and nightmares that has been addressed in many writings as views of possible futures - and this is what makes them great as a role-playing tool.
Although I will use the term 'dream' throughout the text, it also refers to nightmares, which are a stronger, more violent version of a vivid dream. The one you use will depend on the game you're running, but basically they have the same effect.
What has been, what is, and what is yet to come. These are the three strongest indications of the past and possibility a dream might deliver to enhance the dreamer's situation and possible future. By splitting the dreams into these three areas you can decide how they will fit into your story.
It can be more entertaining to remind players of past plots instead of simply sitting down and explaining the story up to that point, and it's also handy for trying to inform the PCs of an important item or plot point they have missed or disregarded during play.
Dreams can also be useful when a character dreams of things that have happened to other people or places he/she might never have seen or visited. Wouldn't it be spooky if you dreamt of a man you had never seen before who leans towards you and says 'I love you, son'? This creates a mystery that might be unraveled as the plot unfolds. Perhaps the PCs are chasing someone they believe to be a threat and yet the dreams are trying to tell one of the PCs that they are chasing the wrong person and that what they see in their sleep is what actually happened. Remember, we face the future by learning the lessons of the past.
To combat this, keep the images cryptic and have dreams be more of a series of symbols. For example, a symbol of a threat to the PC's face, perhaps a clawed hand reaching from darkness or the trademark great Flaming Eye, might be an indication that the enemy is closing in. A symbol of a tearful Elven maiden standing in the charred smoking ruins of a wood might be an indication that something terrible is about to happen to the Elven Kingdoms.
For example, a dream of the PCs' King might show him being crushed to death in the icy grip of a huge gauntlet – this might not mean that the King himself is in danger, but the Kingdom as a whole. As the dreams continue the larger picture slowly start to emerge, so the players, having thought that just their friend's life was at stake, start to realize there's a greater peril.
The question that will be asked at some point is this – why are the dreams coming to the PCs? What is making them have these dreams which have such a diverse affect on their futures? This can be answered whichever way you choose, but the main plot points can be:
The supernatural quality of dreams might help the plot by giving it that sense of otherworldliness, a vision of a reality that everyone sees because our dreams are of the same construction, a bundle of images and noises that do not wholly connect but have an impact on our thoughts and feelings.
All the players at the table might have their own idea of what the game world is like and how it is represented in visual terms, but the inconsistency of the content of dreams makes it palatable to everyone. It's not necessary to go into minute detail as far as the dream is concerned. Just give enough to give the player the images they need.
Dreams are a great way of getting the players on track, or even back on track. Let's say that they've been hunting the Pearl of Wisdom for a couple of games but they have hit a dead end – they've missed or forgotten about a vital piece of information. However, just reminding them GM-to-player or through an NPC seems a little contrived.
Instead, a PC could dream of a great fiery mountain surrounded by water guarded by the hordes of darkness. This image means very little at the time of the dream, but as the plot continues hints are dropped to the existence of such a place and the players realize that this is where they must go. It's not a good idea to have a blatant dream where a gnome with a road map jumps out and says 'go this way, the pearl is in a big volcano' as this is just telling the players what to do next with no realization or deduction on their part.
The question is – who has the dreams? It might be a character trait that one of your players has and this is the PC the dreams are channelled through, for better or for worse. This means singling out one player and giving them the information. This might take the form of notes or direct telling. Notes are a good idea as you can prepare them ahead of time and hand them to the player and let them read it.
If you want the dream to be more realistic you could take the note from the player after a certain time and they will have to remember what they can – this reflects the fact that dreams fade with time. Other than that, you can take them from the room, sit them down and tell them what they dream. What they then choose to communicate to the other players (what they remember, that is) is up to them.
Group dreams are a little more complicated but do add an extra dimension to the game. If all the PCs have the same dream then there's definitely something weird going on! Group dreams also help because each player will remember different things. You might even want each player to have a different dream which, when combined with the other dreams of the other PCs, makes more sense. This is hard work though, and might lead to misconceptions and then errors in judgment. It's usually a lot simpler to give them all have the same dream and then let them decide on its meaning from there. Group dreams can make for some long, interesting discussions as interpretations differ.
Here are some hints on the actual use of dreams and nightmares in a game.