(I find teeth dreams to be among the most disturbing....)
At the very least, I believe dreamtime provides a channel for our subconscious to communicate with us without the noisy interference of our conscious brains. Sometimes perhaps, our subconscious is just venting, but other times it is problem solving or pointing us to the places of our greatest inherent power.
I often make sketches of my dream imagery or incorporate dream elements in my paintings. I have grand fantasies about constructing garments, buildings, whole worlds, based on strange and beautiful things my brain has presented to me while I've slept.
But sometimes the imagery is a metaphor with a longer arc.
Yesterday I had a thrilling conversation with a friend about one of his dreams. It gave me perspective about an old dream of mine. In retrospect I can now see my dream as a marker of where I was headed. I knew it's significance at the time, but not the specifics. Now I can mark my progress against it and know I am on the right track.
We are wise. We only need to give ourselves the space to be seen and heard.
If you are interested in dream analysis, Jeremy Taylor's books are hugely inspiring and informative: http://www.jeremytaylor.com/