Empirical studies largely support the continuity hypothesis of dreaming. Despite of previous research efforts, the exact formulation of the continuity hypothesis remains vague. The present paper focuses on two aspects: (1) the differential incorporation rate of different waking-life activities and (2) the magnitude of which interindividual differences in waking-life activities are reflected in corresponding differences in dream content. Using a correlational design, a positive, non-zero correlation coefficient will support the continuity hypothesis. Although many researchers stress the importance of emotional involvement on the incorporation rate of waking-life experiences into dreams, formulated the hypothesis that highly focused cognitive processes such as reading, writing, etc. are rarely found in dreams due to the cholinergic activation of the brain during dreaming. The present findings based on dream diaries and the exact measurement of waking activities replicated two recent questionnaire studies. These findings indicate that it will be necessary to specify the continuity hypothesis more fully and include factors (e.g., type of waking-life experience, emotional involvement) which modulate the incorporation rate of waking-life experiences into dreams. Whether the cholinergic state of the brain during REM sleep or other alterations of brain physiology (e.g., down-regulation of the dorsolateral prefrontal cortex) are the underlying factors of the rare occurrence of highly focused cognitive processes in dreaming remains an open question. Although continuity between waking life and dreaming has been demonstrated, i.e., interindividual differences in the amount of time spent with specific waking-life activities are reflected in dream content, methodological issues (averaging over a two-week period, small number of dreams) have limited the capacity for detecting substantial relationships in all areas. Nevertheless, it might be concluded that the continuity hypothesis in its present general form is not valid and should be elaborated and tested in a more specific way.