Neuroscientist J. Allan Hobson has hypothesized what might be occurring in the brain while lucid. The first step to lucid dreaming is recognizing that one is dreaming. This recognition might occur in the dorsolateral prefrontal cortex, which is one of the few areas deactivated during REM sleep and where working memory occurs. Once this area is activated and the recognition of dreaming occurs, the dreamer must be cautious to let the dream delusions continue but be conscious enough to recognize them. This process might be seen as the balance between reason and emotion. While maintaining this balance, the amygdala and parahippocampal cortex might be less intensely activated. To continue the intensity of the dream hallucinations, it is expected the pons and the parieto-occipital junction stay active.
Treatment for nightmares
It has been suggested that people who suffer from nightmares could benefit from the ability to be aware they are indeed dreaming. A pilot study was performed in 2006 that showed that lucid dreaming treatment was successful in reducing nightmare frequency. This treatment consisted of exposure to the idea, mastery of the technique, and lucidity exercises. It was not clear what aspects of the treatment were responsible for the success of overcoming nightmares, though the treatment as a whole was successful.
Australian psychologist Milan Colic has explored the application of principles from narrative therapy with clients' lucid dreams, to reduce the impact not only of nightmares during sleep, but also depression, self-mutilation, and other problems in waking life. Colic found that clients' preferred direction for their lives, as identified during therapeutic conversations, could lessen the distressing content of dreams, while understandings about life—and even characters—from lucid dreams could be invoked in "real" life with marked therapeutic benefits.
Perception of time
The rate that time passes while lucid dreaming has been shown to be about the same as while waking. However, a 1995 study in Germany indicated that lucid dreaming can also have varied time spans, in which the dreamer can control the length. The study took place during sleep and upon awakening, and required the participants to record their dreams in a log and how long the dreams lasted. In 1985, LaBerge performed a pilot study where lucid dreamers counted out ten seconds while dreaming, signaling the end of counting with a pre-arranged eye signal measured with electrooculogram recording. LaBerge's results were confirmed by German researchers in 2004. The German study, by D. Erlacher and M. Schredl, also studied motor activity and found that deep knee bends took 44% longer to perform while lucid dreaming.
Awareness and reasoning
While dream control and dream awareness are correlated, neither requires the other—LaBerge has found dreams which exhibit one clearly without the capacity for the other; also, in some dreams where the dreamer is lucid and aware they could exercise control, they choose simply to observe. A 1992 study examining four forms of lucidity (knowing that dreamt people are indeed dreamt, that objects won't persist beyond waking, that physical laws need not apply, and having clear memory of the waking world) found less than a quarter of lucidity accounts exhibited all four, with scores increasing with experience.
Near-death and out-of-body experiences
In a study of fourteen lucid dreamers performed in 1991, people who perform wake-initiated lucid dreams operation (WILD) reported experiences consistent with aspects of out-of-body experiences such as floating above their beds and the feeling of leaving their bodies. Due to the phenomenological overlap between lucid dreams, near death experiences, and out-of-body experiences, researchers say they believe a protocol could be developed to induce a lucid dream similar to a near-death experience in the laboratory.