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The COVID-19 pandemic has dramatically influenced our lifestyles and sleep habits, compromising our ability to effectively process and regulate emotions. We explore a neurobiological perspective to illustrate that dreams and nightmares during the pandemic may be indicative of an increased emotional load in our waking lives. We also propose that the combined impact of daily stressors and poor sleep behaviours brought on by the COVID-19 pandemic may lead to detrimental psychological health outcomes. These negative effects are ultimately perpetuated through a vicious cycle, necessitating the development of appropriate and timely interventions. We suggest that dreams and nightmares can showcase the role COVID-19 as a chronic population stressor. As this pandemic ensues, researchers should not overlook the importance of dreams and how sleeping habits are linked to waking emotional states.