In Act V of A Midsummer Night's Dream, Theseus and Hippolyta exchange views on the dreamlike adventures reported by the young lovers. Theseus dismisses their stories as fantasies of wish fulfillment, but Hippolyta points out that despite their strangeness, the tales reflect an adaptive change in the psychic reality of the lovers. The dramatic action of the play supports Hippolyta's view. The release of Demetrius from his transferential infatuation with Hermia comes at the moment of awakening from a dream in which he has matched his current feelings for Hermia with a repressed libidinal fantasy of childhood. This example of a correction dream illustrates how condensation in dreams functions adaptively in matching a new experience with previously stored representations of related events in the past. It also illustrates the ability of the matching process to go beyond the narrow logical categories of waking thought to reach deeper levels of experience otherwise inaccessible to the dreamer. This ability accounts for the important role played by dreaming in the creative process generally and in the day-to-day working-through process of psychoanalytic therapy. The adaptive function of dreaming is subject at many points to interference from the censorship mechanisms discovered and emphasized by Freud. A theory of dreaming combining these antagonistic processes is more consistent with the data of the sleep laboratory than the traditional psychoanalytic theory alone. It also provides a better fit with the introspective date more familiar to the analyst as illustrated by Freud's well-documented analysis of his own dreams.