I do not think I have ever taught a philosophy session without ending up using the dream metaphor as a teaching tool to explain both Vedantic and Buddhist metaphysics. It is something we all experience so it serves as a good teaching tool that many students can intimately relate to which aids in grasping—at first intellectually and perhaps later in a more heart-based way— the samsara/nirvana or maya/brahman equation even though both models differ in specifics. However, outside of being used as a metaphor for teaching, dream practice has been used as a form of spiritual practice in itself. The power of dreams has been commented on and reflected upon in Indic and Tibetan sacred literature as holding the potential for prophecy and insight into the unconscious mind and later in more advanced practices in the Tibetan tradition, it has been used as a field in which to directly receive teachings from your spiritual guru and also used as a way to enter temporarily the realm of Clear Light as preparation for when we enter it fully at death in the postmortem state. The latter is one of several ways you can train yourself in the process of death so leaving this incarnation is illuminated and peaceful.
I have been guided in the practice of lucid dreaming by one of my teachers as a way to aid in my own understanding of the essential (or non-essential) nature of the phenomenal world and what spiritual “lucidity” really means. At first I did doubt my ability in this practice. It was difficult because like all else, it required a regular repetitive training of the mind in the daily “waking” state to effect the outcome in the “dream” state and then I had to develop a practice while dreaming. However, to my amazement it began to work. I highly recommend The Tibetan Yogas of Dream and Sleep by Wangyal Rinpoche. The first half of the book really lays it out in the Tibetan context and is really a lovely read. Here is a little selection by Georg Feuerstein about the topic in his ‘The Psychology of Yoga’ book:
“Tibetan Dream Yoga is based on the recognition that we spend about one-third of our lives in the sleeping state, and much of this time is given to dreaming. In comparison with the waking state, and not unreasonably, we consider our dreams “unreal.” On closer inspection, however, our waking state is just as unreal. From the perspective of Tibetan Buddhism, both states of consciousness area unreal, or illusory, in relation to enlightenment. They are unreal only insofar as our true nature (called dharma-kāya) is obscured in them. The purpose of Dream Yoga is to use dreams as an opportunity for spiritual practice, that is, the practice of mindfulness…this consists in a mental attitude that emotionally steers the middle path between attraction (or desire) and aversion, both of which merely create karmic deposits (unconscious activators, or samskāra) and thus bind the mind to the never-ending cycle of phenomenal existence, or samsāra. These karmic deposits, or impressions, in the mind are at least partially activated during sleep. They emerge in the form of dreams in which our semiconscious sleep identity plays an active role. As we learn to become aware during sleep that our dreams are projections of our mind, we can also gradually see the same process at work during waking consciousness.”