Why dreams can be surprising? If we all agree that dreams are created by our own minds, then how could some dreams surprise us, since, after all, all the things that could happen in a dream are made up by us, and should be utterly predictable and be of no surprise at all?  For example, if you are awake and doing some day dreaming, you would never be surprised by what you are imagining, right?

Then why some dreams are surprising, and kind of unpredictable?
Let's first dispel this myth: "all the things that could happen in a dream are made up by us, and should be utterly predictable".  This is a common fallacy known as the introspection illusion:


  The introspection illusion is a cognitive bias in which people wrongly
  think they have direct insight into the origins of their mental
  states. ... In certain situations, this illusion leads people to make
  confident but false explanations of their own behavior (called "causal
  theories") or inaccurate predictions of their future mental states.


This is a common notion in psychology research.  So the more interesting question is not why are we surprised by our dreams, so much as why are we not surprised by our non-dreams.  But I digress.

Dream imagery is often generated partly from long-term memory rather than external stimuli.  Unlike normal perception, which is continuous and generally sensical, dream imagery is disjointed and not sensical.  Interestingly however, subjects of dream research report only realizing the bizarre nature of their dreams after they wake - they are not "surprised" by the imagery during the dream:


  During most dreams, the person dreaming is not aware that they are
  dreaming, no matter how absurd or eccentric the dream is. The reason
  for this may be that the prefrontal cortex, the region of the brain
  responsible for logic and planning, exhibits decreased activity during
  dreams.