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Twenty participants hand-wrote reports of their dreams and reports of waking life events, and used an extensive lexicon of emotion words and types to rate the emotions experienced in each scene of each report. From these ratings, the incidence and intensity of 22 different emotion categories specified by a cognitive model of emotions was assessed. Emotions were found to be present in virtually all scenes of all dream reports and only one of the 22 emotion types was never used in the ratings. The incidence of most of the emotion types was similar to that of reports of important life events. There was also evidence that the incidence of positive emotions was lower in dream reports than event reports while the incidence of fear was higher. Specifically, the mean number of positive emotions per scene was lower and the proportion of fear was higher in dream reports than in event reports. These results are consistent with the notion that emotion is as much a part of dream experience as it is of important waking life experience. However, the results also indicate some unique features of these dream reports. The pattern of differences may be due to a process of emotion production that inhibits positive emotions while facilitating fear during dreaming. Such a process might also explain the frequent occurrence of frightening nightmares and may be consistent with a theory of dream function in which dreaming regulates emotion during sleep.