Here is an analysis of the Buddhist approach to dreams. Just quoting the conclusion.
Following a Buddhist example, how are we supposed to deal with dreams?
Do we dismiss them as empty and false, do we diagnose our health from
dream symptoms, do we systematically analyze their symbols as an index
of our religious practice? Dreams used as a teaching device pointing
the way to enlightenment takes a negative approach to a positive goal.
The emptying out of both dreams and reality frees the mind from
duality and attachments to conditioned states. Perhaps the Buddhist
approach to dreams is identical with the path to understanding the
purpose of waking life: transforming ignorance by the brilliant sword
of Prajna wisdom. We must wake up from our “dream within a dream,”
before we can know that we are actually sleeping through our lives.
After awakening there is no need to dream any longer.
An interesting contemporary example of a dream about the Buddha, comes from the Theravada Buddhist meditation teacher Dipa Ma:
After her husband died in 1957, and her only surviving child, daughter
Dipa, was seven years old, Nani "Dipa Ma", was drowning in sorrow and
at the lowest point in her life. One day a doctor said to her: :"You
know, you're actually going to die of a broken heart unless you do
something about the state of your mind."
Because she was living in Burma, a Buddhist country, he suggested that
she learn how to meditate. It was then she had a dream in which the
Buddha appeared to her as a luminous presence and softly chanted a
verse from the Dhammapada:
Clinging to what is dear brings sorrow, clinging to what is dear brings fear. To one who is entirely free from endearment, there is no
sorrow or fear.
Dipa Ma understood the Buddha's advice as a call to master Vipassana