 The problem emerges when the hippocampus is carrying information that's too much or too hot for the larger brain slash mind to handle. When a recent memory is too strong to be easily and unremarkably processed, it presents in our dream world as a nightmare. If that still doesn't download the information from the hippocampus, then the trauma either becomes buried in the subconscious of process, Freud referred to as repression, or it gets thrown back into the hippocampus the next morning. It's as if the brain says, whoa, that's too much for me to process in one evening. Please hang on to it for another day.