Examination of the analogy between dreams and literature within a neoformalist perspective indicates that current accounts diminish the importance of the other major literary tropes, such as metonymy and irony, and fail to appreciate the importance of interactive theories of metaphor. By contrasting collective and composite dream images (Freud, 1900/1953), the reductionistic nature of current conceptions of dream metaphor becomes evident. An alternative, based on composite dream images, substantiates States (1988) characterization of the analogy between literature and dreaming. A method of dream analysis is introduced that identifies central themes within the dream, independently of dreamer associations, and specifies the expressive devices that provide defamiliarizing transformations of those central themes. Preliminary explorations using this method indicate the importance of identifying the defamiliarizing transformations of composite dream images in any attempt to understand their effects, especially as these become evident in impactful dreams.