I dream in third person. I'm not sure if this happens to other writers.
In most dreams, the dreamer is a participant in the action - in my dreams I'm sometimes a spectator. I think what it amounts to is that I'm dreaming in narratives. I'm don't know if this comes from being a story teller, or I'm a story teller because of it, but I'm sure the two are related.
Last night I dreamed I was on a trip with my debate team; we checked into a Holiday Inn and were taking our bags to our rooms. At this point I disappeared from my own dream. The setting must have suggested to my unconcious mind a scene and the dream became a scene, like a scene from a movie or tv show. It was a bit of dialogue you've seen a million times, not at all original, and I'm sure you could have written it yourself. A smarmy older executive type - gray-haired but attractive - tries to pick up a woman in a hotel bar and is rebuffed. The woman tells him off in terms that show she sees right through his cocky self-assured exterior to the cringing insecure little boy beneath. The executive type stands there stunned, unable to summon words after being not only refused, but exposed and suddenly, painfully, vulnerable. For a flash we feel sympathy, not for the woman being hit on, but for the crushed feelings of the executive.
Freud might say that the executive was really a projection of myself, but I don't think so, or at least that wasn't the primary thing he was. To start with, there was no way this dream could be construed as wish-fulfillment, unless my wish was to have a little story played out for me. Moreover, and I have to admit this, the scene was so trite and cliche; as I say, it's a scene we've all watched about a million time. Nevertheless, the fact remains.
I dream in third person.
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