How do you explain "Dreams" and "Dreaming" to your child?

I had this funny conversation with my boy last night?

My Boy: Mummy, can you see the round round thing and the bubble on top of my head when I dream?

MG: Haha. No I can't see it.

My Boy: But where is it. Is the bubble up up up so very high?

MG: Your dream is in your head so we can't see it. Thats why they draw those bubbles in the cartoon to show us that they are dreaming. Otherwise we won't know that they are dreaming.

Not a very fantastic explanation but it'll do for the time being. Haha. How do you explain dreams or the concept of dreaming to your child?