This paper presents the view that psychoanalytic tradition involves a belief in the existence of psychic reality and the transmission of a method what allows access to it, rather than a belief in the contents of that reality. Through an analysis of several texts by Freud, the paper maintains that psychic reality should be defined in terms of the compulsive power of unconscious drives and the hallucinatory activity issuing from the id. It points to a tension between this view and that expressed in Freud's writings on historical truth, which explain the compulsive character of psychic reality as a result of its historical source. Further light is shed on the concept of psychic reality by understanding the role of action in Freud's thinking about the processes of representation involved in the dream. Based on this understanding, it emerges that the unconscious should be seen less as an oracular message to be decoded than as a continuous creation of scenes and stories that puts in question all historical truth. The implications of this position for psychoanalytic tradition and method are noted.