As a person who rarely remembers his dreams (and when I do, they’re generally incredibly mundane), I can never believe that people remember their dreams with all this detail and specificity.
I don’t think they’re actually remembering their dreams. Dreams are what I like to call brain junk: They are just the result of the brain trying to reorganize information during it’s daily off time. In other words, it’s just a hallucination. If there were a dream recording machine, what you would see would probably make no sense at all. Humans always want to build stories and structure around things that don’t have much story and structure in the first place. So, when someone remembers a dream in great detail, they are most likely build a non-existent and made up story around a general feeling.