A popular method for interpreting dreams is free association. Take each character, object, and image in your dream- you may want to write them down to help you remember them as you go along- and free associate to each one. Think of the image/object/scene/person and think about what it reminds you of. What is the first thing that comes to mind when you imagine it?

Allow your mind to wander from one association to the next. This should eventually lead you to a conclusion about what the dream means. You will probably find that several object in the dream, when free associated, will lead up to similar memories, thoughts, ideas, or emotions.
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Free writing is a similar method to free association. However, in a dream free write, you understand and interpret your dream by writing out a string of words, phrases, or impressions on a piece of paper. This may be in the form of a basic paragraph or even a poem.

You can begin by taking a specific scene, character, or object from the dream and beginning your free write. Write down the character/scene/object and then start writing everything that comes to mind when you are thinking about it. Even if it sounds a little stupid when it comes to mind, write it down and move on to the next. Try to keep it as nonstop and fluid as possible. Here is an example.
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I am not sure what the source of the following article is- if you know the author, please tell me.

If you are feeling exceptionally daring, get together some friends to act out your dreams like a play. Gather clothing and props that would be appropriate to the scenes, write out a basic script or just tell them the idea of it, and assign roles as you deem most reasonable.
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Dream dialogues are a fun way to learn about what the characters in your dream are trying to “teach” or tell you. Every character represents and aspect of yourself- in body, spirit, or mind. Dialogues allow you to take what the dreams lets you know about your character and reflect on that person by creating a dialogue based on your questions, and what the dream person would say in reply. (Note that the character doesn’t really have to be a person, it can be an animal or object that you consider to be very much “alive”.)
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The value of lucid dreaming is immeasurable. When individuals begin to have the experience of lucid dreaming, the truth of who they really are and their personal reality expands. Have you ever been asleep and then suddenly become aware that you were dreaming? In lucid dreaming, the dreamer is aware that he or she is dreaming during the dream.

Most of us have experienced some degree of lucidity. When the dreamer realizes that some segment of the dream is only a dream, it is called ‘prelucid dreaming.’ A fully lucid dream is one which the dreamer definitely recognizes that he is dreaming. These dreams tend to seem more real and more vivid than normal waking reality. Also, the sense of sound, sight, taste and smell seems intensified.
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This FAQ is a brief introduction to lucid dreaming–what it is, what it takes to do it, and what can be done with it. Please note that this is not the full extent of knowledge available in this area. References to more comprehensive sources are given below. If you are serious about learning to have lucid dreams yourself, then consider taking advantage of the excellent resources.
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Lucid Dreaming has been around for quite a long time, although it is just now becoming a widely discussed topic. The earliest recorded lucid dreams date back to as early as the fifth century, in fact, the record came from a written letter by St. Augustine in 415 A.D. Another well- known record of lucid dreaming came in the eighth century came from Tibetan Buddhists in their Tibetan Book of the Dead. The Buddhists spoke of a form of yoga designed to maintain full waking consciousness while in the dream state. These ancient dream yogis possessed an unequivocal understanding of dreams, which was said to be more advanced than the knowledge we posses today.

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Closely related to the dream journal techniques, using these standards can help you to better recall dreams, thereby influencing your awareness when in the dream state.

Look for patterns and recurring themes in your dreams.
If you don’t “get it” the first time, your brain often sends you the same dream-message again. Many people experience recurring dreams, or even recurring nightmares. That’s just your brain, trying to get your attention and convey an important message to you!

View each character in the dream as an aspect of yourself.
For example, if there is a “devil” in the dream, see what happens if you view that character as “the devilish/destructive part of myself”. Even if the character is someone you know “in real life” try using this technique. Instead of your mother, maybe the character represents the motherly part of you, or a part part of youthat is like your actual mother.
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