During the transition between floors, Isaac's nightmare shows the item that will be found in the Treasure Room and what Boss will be at the end of the floor.
Curse of the Blind items will be revealed, as well as the hidden second item on the alternate floors (Downpour, etc.)
Grants a Half Soul Heart upon entering a new floor (this includes each floor of the Ascent).
If the floor Isaac is going to has no Treasure Rooms, Dream Catcher will simply show the floor's boss. If there are no Treasure Rooms or bosses on the floor (i.e. in The Shop, Ultra Greed, and Home), the dream will instantly be skipped.
Dream Catcher cannot show glitched items generated by TMTRAINER. Instead, it will just show The Sad Onion.
Dream Catcher will show a poop in the Treasure Room if there are no item pedestals in the room.
On Corpse II, the boss will appear as a blank space; on the special Mausoleum/Gehenna II floor that leads to Home, it will appear as Mom.
On The Void, the Dream Catcher will show all the bosses that can be found in the various boss rooms, starting with Delirium.
Synergies
Book of Revelations: If the floor boss is revealed to be one of the horsemen, therefore Book of Revelations can be used early, as the downside is no longer relevant.
Satanic Bible: If the floor boss is revealed to be one of the horsemen, and if the player has no interest in the Cube of Meat or doesn't mind paying health for it, Satanic Bible can be used early.
Interactions
Devil's Crown: Dream Catcher will show what the Treasure Room will have if Isaac chooses to enter the room without the crown.
Found Soul: The soul will receive half a soul heart for every new floor he follows Isaac to, allowing him to survive multiple hits and gather up to a maximum of 12 soul hearts. His health resets when the trinket is dropped.
More Options + Downpour / Dross, etc.: Dream Catcher will not show the third item if going to the alternate floors.
Red Key: When on alt path, if a bonus Treasure Room is encountered before the regular Treasure Room, the left item showed in the dream sequence will appear in that red Treasure Room, but the right item showed in the dream sequence will still be in the regular Treasure Room.
Tarot Cloth + XVII - The Stars: The boosted reverse Stars card converting a Treasure Room into a double choice treasure room will make Dream Catcher's prediction inaccurate, neither of the items offered is likely to be the one displayed.