Jung proposed that the average dream is similar in structure to a drama, comprising of four distinct stages:

(1) ‘Exposition’ - The opening scene which introduces place, characters and the situation that the dreamer will face (an issue or problem expressed metaphorically).
(2) ‘Development’ - The emergence of the plot.
(3) ‘Culmination’ - Something significant happens, the main character responds.
(4) ‘Lysis’ - The conclusion of the dream. The ending of the dream is regarded as the most important stage. It signifies how the dreamer might deal with the problem or issue that was expressed in the first stage (exposition). In essence, the dream-work creates a solution or result for the dreamer.

Jung maintained however that some dreams could be too short or fragmented to fit into this structure.

Unlike Freud, Jung believed that the manifest dream (the dream as remembered) contains the actual meaning of the dream – the dream is therefore not distorted or disguised in any way. It is a message or natural expression of the unconscious. It is difficult to interpret and understand since it is expressed in its own unique language of symbols or metaphors.

In order to interpret a dream, Jung used the process of amplification. In essence, amplification involves elaborating on a dream image in order to determine its significance through direct and indirect association. This is achieved by gaining an insight into the dreamer’s:-

(1) personal associations with the image (direct association). In order to discover the feelings evoked by a particular dream image or symbol. The meaning and significance of a particular word or image can vary greatly between individuals depending on the effect it has had on his/her life.
(2) The cultural significance of the image,
(3) as well as drawing parallels from the symbolism contained in folklore, history, fairytales, religion, mythology, rituals etc (archetypes).

Jung also developed the method of active imagination which can be used in dream interpretation. The individual meditates, concentrating on a specific dream image. Then allows the image to develop freely without making a conscious effort to change it. The individual simply observes how the image gradually develops over time.

Jung believed that a series of dreams is much easier to interpret than a single dream. This is due to the fact that significant images will be repeated and the basic ideas and themes behind the dreams can be recognised more easily. A series of dreams usually indicates a complex conflict.

Jungian dream interpretation also places a great deal of importance on the conscious situation of the dreamer. The dream is not an isolated event and cannot be detached from the dreamer’s everyday life. Therefore a number of conscious attitudes will begin to cluster together within the unconscious. Dreams tend to compensate for these conscious attitudes (or personality traits), which will be repressed, hidden or forgotten. For example, if the dreamer is repressing their sexual feelings or needs in waking life the dream may compensate for this by providing a dream full with sexual imagery. This has a balancing effect as the dream is providing a different viewpoint from the conscious situation. This theory of compensation is therefore based on the belief that the psyche is a self-regulating system.