The people that appear to us in dreams are faces that we have ever seen. If in your dream you are an elite soccer player, each of the 100,000 faces in the crowd that cheers you belong to people who passed for old actors, fleeting classmates from school, a guy who rang the bell to sell an encyclopedia, a substitute teacher music that left the classroom crying, etc.Of course, it is likely that we will see some that we do not recognize because they are of people that we saw perhaps only once, but our brain saved it, as it keeps the hundreds of thousands of faces that we see during our lifetime.
What about the monsters we see in our dreams? We've never seen them irl
mysterious cities/neighborhoods and other strange places I've never been to often appear in my dreams.