Dreams - Process of selection?

Last few days I was getting sleepy early and going to to bed between 8 -9. May be thats why I was not sleeping deeply and having so many dreams. Very often, I remember part of the dreams in the morning. and then I started seeing a pattern. Most of the dreams were related to something I have heard, seen or done during the previous day. I started wondering. Is this a process of the brain where it rewinds all the events of the day during the sleep and selects the significant ones and transfers from RAM to Hard Disc for future use??? Probably a wild thought, but it appeared to me it is a likely scenario :)
Oh, yes. I forgot to tell you. I was saying I love you more often to Usha and Nikhil and to a few other too (Don't tell Usha!). And, yes, I got upset only a few times during the past 15 days - around 15 times:)