There are numerous stories concerning ancient Ch'an masters and dreams. One story tells of a Ch'an master who wanted to visit a farm that belonged to a monastery in another area. The next morning, without telling anyone, he left. By the time he arrived, the attending monk at the farm had a full meal waiting for him. The master asked how he knew and the monk replied that in a dream the night before the deity of the land told him that the master would be coming, so preparations were made. The master replied that the offering should be made to the deity, not him. In this case the dream was obviously authentic.

Another story concerns Master Hsu-yun (1840-1959). Once he dreamt that he went to a special area of a heavenly realm where Maitreya Buddha resided. Here Master Hsu-yun ran into old friends and masters of his contemporaries. He said he wanted to stay, but Maitreya told him the karma for his present life had not been finished so he would have to return to the world.

The Mind Only school says that dreaming is one of the consciousness states. Consciousness usually manifests through the senses, but there can also be solitary mental consciousness that does not arise through the senses. There are three levels of solitary consciousness. One is in dreams, one is in samadhi, and one is in insanity. The solitary consciousness of dreams arises from karma accumulated since time without beginning. When this consciousness arises, it has no connection with the senses. On the other hand, we can't say that it has no external reality because it came from previous karma, which was created through interactions with the environment.

Several sastras are said to have been written by masters while they were in dream states. For instance, an important Mind Only sastra called the Yogacary-abhumisastra was supposedly written by Asanga while he was in such a dream state. Every night while Asanga was asleep, Maitreya Buddha came to him and told him what to write. Since Asanga was the only one who had these dreams, we must take his word for it.