Waking up with dream recall occurs because the person woke directly out of REM sleep.
"But so if you woke up and you remember a dream, it's cuz you woke up out of REM. That's all that's all that means." (said at 1:01:06)
The assertion that recalling a dream upon waking implies that the individual woke directly out of REM sleep is contradicted by sleep physiology research. While dream reports are generally more frequent, vivid, and narrative-like following awakenings from REM sleep, substantial scientific evidence demonstrates that dreaming and successful dream recall also regularly occur upon awakening from non-rapid eye movement (NREM) sleep stages (N1, N2, and N3). Laboratory polysomnography studies show that awakening from NREM sleep yields dream recall in 40% to 70% of awakenings, sharing specific posterior cortical activation patterns with REM dreaming.
- contradicts: Cortical activation patterns herald successful dream recall after NREM and REM sleep. (Biological psychology 2011)
"Dreaming pertains to both REM and NREM sleep. However, frequency and regional specific differences in EEG activity remains controversial." (abstract, passage verified)
pubmedfull study (doi) - contradicts: The neural correlates of dreaming. (Nature neuroscience 2017)
"Traditionally, dreaming has been identified with rapid eye-movement (REM) sleep, characterized by wake-like, globally 'activated', high-frequency electroencephalographic activity. However, dreaming also occurs in non-REM (NREM) sleep, characterized by prominent low-frequency activity." (abstract, passage verified)
pubmedfull study (doi) - contradicts: Increased Awakenings From Non-rapid Eye Movement Sleep Explain Differences in Dream Recall… (Frontiers in human neuroscience 2019)
"Interestingly, HFRs had significantly more awakenings, as well as a higher number of longer awakenings, from non-rapid eye movement (NREM) stage 2 sleep. Hypothesis (2) was not confirmed: There was no significant difference in rates of REM density between groups. This is the first study to provide evidence that awakenings from NREM 2 sleep might underlie increased DRF in HFRs." (abstract, results, passage verified)
pubmedfull study (doi)