dreams are just your sub-conscious tripping on dmt. it's pulling from your thoughts, but without any rational process tied to it.
Not confirmed. Even after the research done in The Spirit Molecule (book/documentary)
People like to say that DMT is released when you die aswell, which is why "u c da lite b4 u die yo" but not too sure that DMT is endogenous.
Also important to remember that DMT is a tryptamine (duh) and melatonin (which is actually endogenous and plays a role in circadian rhythm and dreaming to a certain extent (ie:if i take a decent amount of melatonin, my dreams will be incredibly vivid)) is a tryptamine. This may or may not have something to do with the connection of these things.
on a somewhat related note; smoking dmt is not really like dreaming. much easier to remember and draw logical (herp, i know people will laugh at that) conclusions from it. also usually devoid of any of the intimidating or nightmarish things that could occur in dreams.