It's my understanding that dreams are other reality frames in the simulation we call, life on planet Earth.

That life on planet Earth has a rule set we are constrained by. In dreaming, we enter a simulation with a less tight rule set. This allows us to make choices and grow as consciousness, with less restriction.

The choices are made on a being level, not an ego level. Dreaming is not less "REAL' than waking life. I'm sure you have had dreams that are testing your fear. This is the larger consciousness system taking a measurement of your growth.

If we measure up and have replaced fear with love, we graduate to more advanced courses. Like the example you mentioned, where people have precognitive dreams.

The many worlds theory, is a waste of computational resources. Combing your hair back as apposed to combing it to the side, is just not relevant.

Finding out if you would run into a burning house to save a family is. This is why we have a dream reality. We can grow and be tested in a less constrained rule set, where bodily harm to our avatar is not an issue.