Sandor Ferenczi wrote about a typical dream of the “Wise Baby” and later used this figure to represent the child who is traumatized into precocious wisdom, who becomes “the family psychiatrist.” We discuss Ferenczi's theory of traumatization and the “split self,” noting how it was taken up in D. W. Winnicott's “True Self/False Self” conceptualization. We then present three patients' wise baby dreams to show how these trauma theories can be used in dream interpretation and how dream interpretation can support them.