All humans (and human-like beings) dream. Like "thought balloons" in a comic strip, clouds of dreamstuff float "upward" from the dreamer into the Astral Plane. There they form bubbles in the Astral substance, tethered to the dreamer until waking. These bubbles are permeable with, and ultimately dissolve into, the Dream Realm--more commonly called Slumberland or Dreamland, or sometimes the "Land of Nod" (but not this one, or this one ;) ). Given their nature, dreams represent the easiest portal for humans to cross the transitive plane of the Astral and move into the Outer Planes.
Slumberland is ruled--or perhaps merely managed--by a being known by many names, but often called the Dream Lord, or Dream King. He appears as a robed humanoid figure wearing a bronze, mirrored mask. He doesn't create dreams--these come from mortal (and perhaps immortal) minds, themselves--but monitors and maintains them. His castle, with its strangely-angled, dream-logic, expressionistic architecture, sits on the border between the material and immaterial worlds, existing both in Slumberland and on the dark side of the Moon. From there, he maintains the oneironic devices, and monitors the content of the flow of dreamstuff. He strives to ensure virulent nightmares don't readily infect other dreams, and that idle fantasies don't spoil and bloat to become perverse obsessions.
It's a big job, and the Dream Lord doesn't do it without help. Gnome-like creatures called "Sandmen" serve him. They carry pouches of silvery, glinting powder made from dessicated and alcehmically treated dreamstuff. They use this oneiric dust to induce sleep in a mortals, or cause waking dreams, or even to cause multiple beings to share the same dream. This is their primary tool for observing or even entering dreams--supposedly for the purposes of monitoring and testing.
Bugbears aren't the only evidence of corruption in Slumberland. There are persist rumors of Sandmen on the take, selling blue dreams to Hell Syndicate incubi and succubi to slip to unsuspecting marks. There are also rumors of black-market Tijuana bibles produced from the concentrated salacious dreamings of certain celebrities being peddled on the streets of the City, and possibly elsewhere.