we create our own dreams as we experience them. 99% of people 99% of the time dont realize it and just allow their subconscious to do the creating...
during REM sleep our brains are extremely active, most likely consolidating memories from the day, and all the neural activity makes your conscious self believe that it is awake and experiencing something.. since the only other time neural activity happens is when we are being active.
our subconscious tries to make sense of all the nueral activty and throws images, feelings, and sensations in front of our "eyes".. makes us feel as if we are awake. all the things that have recentl been on our mind, our attitudes, our beliefs, and our current trains of thought manifest themselves into dreams.
if you are aware that your dreaming, you can conciously take over the experience and start to create your own experience. doing whatever you wish, in whatever environment you wish...