Plato claims that in human experience things may appear to be a certain way when, in reality, they are very different. So, for example, a straight stick, when placed halfway into a glass of clear water, appears to be bent, when in reality it is still straight. This insight, when extended to all experience , may lead one to conclude that nothing in our experience is exactly the same as it is in reality. Consider the possibility that all human perception results from a sort of filtering process. Because we get our information about material things through the senses, the information that we gain about the material objects around us must be transformed as it passes from the world outside of our senses into the mind of the perceiver.
Nothing is perceived directly - everything is mediated by the sense organs.
The upshot of this way of thinking about our relation to the world is that since we are locked up inside a body that looks out into the world through the windows of our senses, we can never understand things as they really are in themselves or in reality. All we have available to us are the transformed appearances of the real world. Thus, it must also be subjected to a close and careful critique. Now, Nietzsche's point about dreams is that they are a medium that can be compared with the senses. When we dream, we are presented with images that seem to have meaning.