Note that these dreamed events are created in time and space, complete with probable pasts and probable futures. These dreams would be the source of the "time capsules" of the universe that are postulated by Julian Barbour in his book "The End of Time".
We are literally living a dream, and dreaming new possibilities in an endless (and beginingless) process. All life and all physical matter (right down to the smallest subatomic particles) dream. Thus we partake in a multiplicity of shared dreams at various levels with varying degrees of awareness.
“For what would seem to you to be eons, according to your time scale, men were in the dreaming state far more than they were in the waking one. They slept long hours, as did the animals – awakening, so to speak, to exercise their bodies, obtain sustenance, and later, to mate. It was indeed a dreamlike world, but a highly charming and vital one, in which dreaming imaginations played rambunctiously with all the probabilities entailed in this new venture: imagining the various forms of language and communication possible, spinning great dream tales of future civilizations replete with their own built-in histories – building, because they were now allied with time, mental edifices that automatically created pasts as well as futures.
“These ancient dreams were shared to some extent by each consciousness that was embarked upon the earthly venture, so that creatures and environment together formed great environmental realities. Valleys and mountains, and their inhabitants, together dreamed themselves into being and coexistence.
“In ways almost impossible to describe, the ground rules were not as yet firmly established. Gravity itself did not carry its all-pervasive sway, so that the air was more buoyant. Man was aware of its support in a luxurious, intimate fashion. He was aware of himself in a different way, so that, for example, his identification with the self did not stop where his skin stopped: He could follow it outward into the space about his form, and feel it merge with the atmosphere with a primal sense-experience that you have forgotten.
“During this period, incidentally, mental activity of the highest, most original variety was the strongest dream characteristic, and the knowledge [man] gained was imprinted upon the physical brain: what is now completely unconscious activity involving the functions of the body, its relationship with the environment, its balance and temperature, its constant inner alterations. All of these highly intricate activities were learned and practiced in the dream state as the CU’s translated their inner knowledge through the state of dreaming into the physical form.”
(Dreams, “Evolution” and Value Fulfillment, Session 893)