Hypnagogic imagery occurs during the nodding off stage, and can vary considerably, from startling warnings and vivid precognition, to static scenes. Sometimes voices are heard, even entire conversations. In sleep research generally, the hypnagogic state is perhaps underestimated.

Researchers tend to accept that it represents the first stage of sleep, but are more interested in other sleep phenomena. This underpins the point that, as far as knowledge about sleep and dreams is concerned, we are merely scratching the surface. Within the realm of hypnagogic imagery lies a mysterious world that, if better understood, can offer considerable rewards.

Hypnagogic images, according to some, are the result of the visual system "attempting to make sense" of the visual input still available to the eyes when the mind is drifting toward sleep. Even in very low ambient light levels, light penetrates the eyelids, making the patterns of blood flow through them visible. This is the basis for an "interpretation" by the visual system. The visual system may attempt to "force" the input to correspond to, say, a geometrical pattern, or the semblance of some object. Dream images or memory images may intrude into such images.

Precognitive visions seen during hypnagogic imagery are said to be particularly reliable and rarely need interpreting because, usually, they closely resemble future events fairly accurately.