It should be noted that when relating a dream it should be done without adding anything to it or subtracting anything from it. If a person does this he spoils and corrupts the dream. Prophet Muhammad (pbuh) has strongly prohibited anyone from doing this.

Prophet Muhammad (pbuh) said, "Indeed the worst of lies is that of a person who falsely claims to have dream." (Sahih Al-Bukhari). Also 'Whoever claims to have dream which he did not have, will be ordered to tie two barley grains together, which he will never be able to do; and if somebody eavesdrop on some people's conversation which they didn't want him to hear or they tried to keep away from him, then molten lead will be poured into his ears on the Day of Resurrection; and whosoever makes a picture (of a being with a soul) will be punished on the Day of Resurrection and (will) be ordered to put a soul in it, which he will not be able to do." (Sahih Al-Bukhari).

His also reported as saying that anyone who invents a lie linking it to him or his own father or friend, he will not even smell the sweet fragrance of Jannah.

His also reported as saying: “There are three persons whom Allah will punish severely on the Day of Qiyaamah:
1)A person who relates a false dream, he will be made to tie a knot between two grains of barley which he will never be able to do.
2)A man who paints a picture of animate objects; he will be made to put life into them which he will never be able to do.
3)A man who leads a people in Saalah while they dislike him”.

It is advisable for a person who sees an unpleasant or disturbing dream that he spits thrice on his left side as soon as he wakes up and thereafter seek Allah's protection from the accursed devil. Prophet Muhammad (pbuh) and his followers used to do likewise.

THE THREE TYPES OF ISLAMIC DREAMS
Dreams are broken into three parts according to the Sunnah:
1-Ru'yaa - good visions (dreams)
2-Hulum - bad dreams
3-Dreams from one's self

Abu Hurayrah narrated Prophet Muhammad (pbuh) said, "There are three types of dreams: a righteous dream which is glad tidings from Allah, the dream which causes sadness is from Shaitan, and a dream from the ramblings of the mind. (Sahih Muslim).

True or Good Dreams
We can see true dreams are from Allah Ta'aala as Prophet Muhammad (pbuh) said, "True dreams are from Allah, and bad dreams are from Shaitan." (Sahih Al-Bukhari).

True believers are more likely to happen to those who are truthful in their lives as Prophet Muhammad (pbuh) said, "Those of you with the truest dreams will be those who are most truthful in speech" (Sahih Muslim).

Good dreams are also from Allah Ta'aala. Prophet Muhammad (pbuh) said, "If anyone of you has a dream that he likes then it is from Allah. He should thank Allah for it and narrate it to others." (Sahih Al-Bukhari) Good deeds consist of people doing Halaal (lawful) acts.

One should share their dreams with those they like as Prophet Muhammad (pbuh) said, "If one sees a good dream, let him expect good, and not tell it except to those he likes." (Muslim) An example of this is Yaqoob (AS) telling his son, Yusuf (AS) concerning his dream about eleven stars and the sun and the moon prostrating to him (scholars have said the eleven stars were his brothers, and the sun and the moon represented his mother and father): "He said, "O my son! Relate not your vision to your brothers lest they arrange a plot against you. Verily! Satan is to man an open enemy." (Surah Yusuf 12:5) We know the half-brothers of Yusuf were jealous of him to begin with so telling them the dream would probably only serve to increase the jealousy.

Muhammad (S) also told us, "Nothing is left of prophethood except glad tidings." Those with him asked, "What are glad tidings?" He (S) replied, "Good dreams." (Sahih Al-Bukhari)

Bad Dreams
As stated above bad dreams are from Shaitan. Prophet Muhammad (pbuh) told us what to do upon seeing a bad dream. "So when one of you sees a dream which he does not like, he should spit on his left side three times, seek refuge with Allah from Shaitan thrice, and change the side which he was lying (Sahih Muslim) and in another narration in Muslim, Prophet Muhammad (pbuh) told us if we spit three times and seek refuge from Allah then it (the dream) will not harm them." (Sahih Muslim).

Prophet Muhammad (pbuh) also told us that if we saw a bad dream to "stand up and offer prayer." (Sahih Muslim).

Bad Dreams Should Not Be Disclosed
Muhammad (S) said, ...If he has a dream that he dislikes, then it is from Shaitan. He should seek refuge with Allah from its evil, and he SHOULD NOT MENTION IT TO ANYBODY, then it will not harm him." (Sahih Al-Bukhari). If one does tell somebody about the bad dream then there could be the chance that some harm will come out of it.

Dreams from One's Self
These dreams come from one's thoughts and are neither from Allah or Shaitan.