looking on Wikipedia I find this:

In a study published in the journal Human Brain Mapping, participants who were in REM "dream" sleep were also monitored by special MRI imaging designed to visualize brain activity. The researchers found activity in areas of the brain that control sight, hearing, smell, touch, arousal, sleep-wake transitions, balance and body movement.[4][5]

I get concepts in the sense of "just knowing" the backstory for something in a dream.

I heard, and then self-interrogated and found it plausible, that most of a dream is backstory. Suppose a dream lasts 5 minutes subjectively, then the dream would actually be 5 minutes of subjective backstory with a few seconds of visual images. In particular, the dream only lasts a few seconds. (I also understand that the visual images come first, perhaps semi-randomly, and then the brain overlays a story.) Also from the same Wikipedia page:

During dreaming, the primary visual cortex is inactive, while secondary areas are active. This is similar to when subjects are asked to imagine or recall a visual scene, and different from what happens when they are actually seeing the scene.[6]