In the present study, we compared the frequency and intensity of threatening events in the dreams of traumatized and nontraumatized Palestinian children. The aim of the study was to test some of the predictions and hypotheses derived from the Threat Simulation Theory proposing an evolutionary function for dreaming. Most, but not all, of our hypotheses were supported by the findings. We discuss the results in the light of the Threat Simulation Theory, and we also consider whether alternative theories of dream function are able to account for them