Reddit reviews The Dream Drugstore: Chemically Altered States of Consciousness
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Two things, (1) I'm going to recommend mostly books and not textbooks, since you're going to read plenty of those in the future. And (2) I'm going to only focus on the area of cognitive psychology & neuroscience. With that being said:
Beginner:
The Man Who Mistook His Wife for A Hat: And Other Clinical Tales By Oliver Sacks
Brain Bugs: How the Brain's Flaws Shape Our Lives By Dean Buonomano
Kludge: The Haphazard Evolution of the Mind By Gary Marcus
The Trouble with Testosterone: And Other Essays on the Biology of the Human Predicament By Robert M. Sapolsky
The Seven Sins of Memory: How the Mind Forgets and Remembers By Daniel L. Schacter
Intermediate: (I'm going to throw this in here, because reading the beginner texts will not allow you to really follow the advanced texts.)
Cognitive Neuroscience: The Biology of the Mind By Michael S. Gazzaniga, Richard B. Ivry & George R. Mangun
Advanced:
The Prefrontal Cortex By Joaquin Fuster
The Dream Drugstore: Chemically Altered States of Consciousness By J. Allan Hobson
The Oxford Handbook of Thinking and Reasoning By Keith J. Holyoak & Robert G. Morrison
In the book The Dreaming Brain by Dr. J. Allan Hobson, it's explained that the parts of your brain that are active during REM sleep along with the change in levels of certain chemicals in your brain contribute to some common characteristics of dreams.
Thee characteristics are that dreams often feature intense emotions (especially fear, anxiety and surprise), dreams are disorganized, illogical and can contain really bizarre sensory experiences (they begin randomly and you have feelings like falling/flying/running in slow motion), and dream content is very difficult to remember due to the fact that long term memory functions are not active during REM sleep and short term memory functions are not ideal due to low levels of serotonin and high levels of acetylcholine during REM sleep cycles.
Your emotions during dreaming are affected by the chemicals in your brain during the REM cycle and certain regions of your brain being the most active, like the limbic system.
I recommend Dreaming: An Introduction to the Science of Sleep or The Dream Drugstore to learn more about Hobson's activation synthesis theory. His books are hard to read because they're very technical, but they were extremely interesting.