This paper will identify why and how Bion's ideas about dream-work and alpha-function evolved, and the profound implications of this development for what he calls ‘practical psychoanalysis’. Andre Green interestingly comments that for Bion the ‘model of the dream’ was unusually more important than the ‘model of the baby’; and I will consider in particular the question of ‘models’, and their relation to the making of the accurate observations of unconscious functioning we need to underpin our analytic work. It is hoped the paper will contribute to the clinically relevant question of whether there is an important link between Bion's ‘alpha-function’ and mentalization theory.