There are a lot of theories about what dreams are. Metta stated a common one, that your brain is integrating and dealing with issues and images from the day -- they just don't seem integrated the way they come to our minds. Another is that dreams are more reactions to feelings, and dredge up images that somehow go with those feelings -- not necessarily the feelings we're aware of; for example, it's perfectly possible to be stressed about something without even knowing. A more recent theory, formulated after examination of hundreds of images (each) of brains of a whole bunch of dreaming people, is that the brain is balancing out chemical and electrical energies, resetting synapses, and other such things, and the images in a dream are, first, random bits kicked up as different parts of the brain do their balancing thing, and, second, stuff the subconscious whips up to try to tie those images together.
Personally, after pondering a lot of my own dreams, I think there's a bit of all of that: the brain is clearing the circuits, to get ready for another day, the subconscious catches images from that activity, ties it together, and in that process picks up stuff from the day, stuff from worries and delights and other emotions and concerns, and spins it all together.
As a result, in a dream you get symbolism (which Freud always managed to make mean sex), so a tree may not be a tree, but stand for permanence or something, and bits of memories, and touches of fears and hopes, and the subconscious will whip together some sort of framework -- however weird -- to hold it all together. So dreams can tell us that we're worried about something, but hiding it from ourselves, or that we're mad, happy, etc., and can also help us deal with those things... or they can be just a random set of images strung together in a way that makes your subconscious happy by satisfying the need of our conscious (should we remember the dream!) for organization.
An example of the weird things that can tie a dream together: I once had a dream that took me in and out of a kitchen -- and every time, I went out of it into a place I'd lived or visited, coming out of that place's kitchen -- like the world had one kitchen, and that connected everywhere, and just changed fom depending on what place was being connected to. The places were distorted -- houses with extra floors, or houses that in reality had several floors but in the dream those were all on one level -- and the things that happened there, in the dream, were sometimes memories and other times totally warped and alien; but I never went from one to another without going through the kitchen. What my subconscious has devised to tie things together was a kitchen -- but other times it has been a theme (starting new projects) or a person (like the partner in Zorkatron's dream, or occasionally a real friend).
And I can see how that dream could spring from the thread "I've lost faith....".
