This paper highlights the critical role played by the 'life-context' of the dreamer and the 'setting' of dreaming in the formation and interpretation of dreams. It suggests that we dream not to express our repressed childhood wishes, but to experience the repressed (or the ego-dystonic) aspects of currently active developmental conflicts (i.e. the life-context). Elements of the repressed childhood experiences are present in dreams, but they are there for having played a critical role in causing and maintaining current conflicts. The framework within which dreaming, remembering and reporting occurs (i.e. the setting) is seen to exercise an influence on dreams. For example, the dreams reported by an analysand and a

laboratory subject differ not only because of their individual differences, but also because of the differential effects of the two settings. Finally, using these two concepts, an attempt is made to clarify the presence of day-residues in dreaming, and the probable basis of the so-called 'intuitive' interpretation of dreams.