I just finished rereading that chapter so I thought that I would add to this post some interesting details.
REM (rapid eye movement) happens most of the time when we are dreaming. In 1976 these guys located the source of the REM to the pons in the brain stem.

I thought I would type out a little summary of some of the key points in the chapter.
1st off the overall subject of the book is something called Neuro-Psychoanalysis which tries to identify the different parts of the brain involved with different aspects of psychoanalysis.
The maps the dreaming brain and emotional brain are almost identical. The basic-emotional command system that seems to be mainly connected with dreaming is called the SEEKING system. It is a motivational system that is engaged in looking for something to satisfy our needs or appetites. Pleasure/Lust is a subsystem of the SEEKING system. I should also mention here that every time we dream we have an increased blood flow to out groin region.
Dreams and hallucinations come from the same parts of the brain which is located in the lower frontal lobes. Back in the 40's to 60's, when frontal lobotomies were all the rage for schizophrenics, one the criteria for whether or not the lobotomy was successful was whether the patient stopped dreaming.
I should mention that the lobotomy was replaced with a not as invasive operation called a frontal leucotomy.
I recommend reading the whole chapter if you can find the book.