It sounds very close to the "activation-synthesis" model of dreaming, which basically says that your brainstem is sending random signals, your cortex does what the cortex does best--it interprets them as best it can. The result is a dream. In its strictest form, the A-S model does not require, as your explanation does, that you have experienced something before. When you add what you have (which makes sense to do--after all, we should expect past experience to have strengthened some associations), it explains a great deal of dream material--both common and bizarre--without any real necessity of "meaning" in any deep sense.