Ten volunteers were studied in the sleep laboratory. Each was awakened twice from both REM and NREM sleep and asked for their fantasies in response to TAT cards. Only afterward were the subjects asked about their dreams. Stories elicited after arousal from REM sleep were longer, more complex, bizarre, emotional, and vivid than those obtained after arousal from NREM sleep. There were thematic similarities between recalled dreams and the stories. From these results the authors suggest that the mental processes characteristic of the sleep stage are carried over into the immediately following waking state.