Arousal By Dreams—The Function of Dreams—Anxiety-Dreams
After summarizing the crucial points that he has covered so far, Freud concludes that the function of dreaming is to bring "excitations" in the unconscious back under the control of the preconscious (7.5.12). In doing so, says Freud, "it discharges the Ucs. excitation, serves it as a safety valve and at the same time preserves the sleep of the preconscious in return for a small expenditure of waking activity" (7.5.12).
In other words, dreams are kind of like volcanic eruptions, or belches: they release pent-up pressure (the excitations of the unconscious) in order to maintain the holistic stability of the whole.
With this in mind, Freud returns once again to the question of anxiety-dreams and discusses why it is that some dreams fail to "manage" unconscious excitations so that they don't interrupt our sleep (7.5.13-33).
Over the course of this discussion, Freud reiterates his position that "neurotic anxiety arises from sexual sources" (7.5.17), and he offers a few more examples of "anxiety-dreams dreamt by young people" in order to prove this point (7.5.17-26).
One of these examples is one of Freud's own childhood dreams, in which he saw his "beloved mother, with a peculiarly peaceful, sleeping expression on her features, being carried into the room by two (or three) people with birds' beaks and laid upon the bed" (7.5.19). Freud's interpretation of this dream demonstrates that it incorporated a number of impressions related to his budding knowledge of sexual matters.
Freud discusses why it is that the budding sexual knowledge of children might cause them anxiety, and he notes that "sexual intercourse between adults strikes any children who may observe it as something uncanny." It "arouses anxiety in them" (7.5.21).
Freud argues that this is because children experience "a sexual excitation with which their understanding is unable to cope and which they also, no doubt, repudiate because their parents are involved in it" (7.5.21). Therefore, the "excitation" is turned into anxiety.
As he draws this section to a close, Freud uses the opportunity to quote a case that another doctor handled—one that Freud believed was misunderstood. In it, a young boy was experiencing disturbing night terrors. Freud argues that the night terrors had a clear sexual origin, but that this origin was went unnoticed by the doctor who treated the child and reported the case.