they are you. simple as that, your unconscious mind, which lacks reason is talking to itself...you are talking to yourself. if you dream about someone thats not that person it is your mind seeing itself as that...for whatever reason.
Same thing. Though it's believed that nightmares are practice for the real thing. In fact the word nightmare comes from the old English word mare. Which is believed to be a mythological demon or goblin who torments others with frightening dreams.