How are real life events translated into dream symbolism? I'm interested in how significant events from daily life get encoded or translated into dream content. A personal observation can help clarify my question:


  I've observed that for me, "significant, futile mental effort"
  translates into dreams of me being in a classroom in my old middle
  school. The kind of mental effort dictated which classroom I will see
  - history, language or math.


It took me years to make the connection, as the frequency of the dream was rather high while attending school and college. It is only after I started working that I noticed dreams of classrooms were gone and only reappeared following intense, but perceived as pointless mental effort to learn or grasp or produce something. 

I'm familiar with the Freud's theories on how wish fulfillment and repressed sexual desires show up in dreams. On the other hand I'm aware of the much discredited concept of "dream interpretation" with dictionaries of dream symbols.

Have there been studies that lay in between the two extremes listed above and attempted to elicit connections between daily events and how they appear in dreams? Maybe attempts to create personal dream dictionaries, like the one I described in the example?
We do not know a lot about how dreams work yet. However, there are some theories out there. One theory of particular interest is that are dreams are a means of reverse learning.


  In 1983
  Francis Crick of the Salk Institute in La
  Jolla, Calif., and Graeme Mitchison of
  the University of Cambridge in England
  proposed the idea of reverse learning.
  Working from the Hobson-McCarley
  assumption of random neocortical bombardment
  by PGO waves and their own
  knowledge of the behavior of stimulated
  neural networks, they postulated that a
  complex associational neural network
  such as the neocortex might become
  overloaded by vast amounts of incoming
  information. The neocortex could then
  develop false, or “parasitic,” thoughts
  that would jeopardize the true and orderly
  storage of memory.
  According to Crick and Mitchison’s
  hypothesis, REM sleep served to erase
  these spurious associations on a regular
  basis. Random PGO waves impinged on
  the neocortex, resulting in erasure, or unlearning,
  of the false information. This
  process served an essential function: it
  allowed the orderly processing of memory.
  In humans, dreams were a running
  record of these parasitic thoughts—material
  to be purged from memory. 


At any rate, it seems that dreams are less a representation of an event and more a byproduct of random impulses coming from the brain stem. These may be made less 'random' (seemingly) only because the things we think about most and spend most our energy on are probably more likely to be 'happened upon' in the dream state.

Any further tendency to recognize a certain dream pattern after a certain event may be an occurrence of this, as well as an instance of selective remembering, or remembering the instances that support your case and neglecting the instances that don't. Having dreams of a classroom in college is normal because you are in classrooms (and you are unconsciously forced to remember the topics you have picked up on in your own middle school classrooms, which may be later 'dream material'), and associating these dreams with futile mental effort is a broad case, considering that college is essentially a four-year cycle of seemingly-futile mental effort. ;)