The mites that cause scabies are tiny parasites, smaller than a pinhead. They are usually picked up by direct skin-to-skin contact with someone who already has scabies, and only very rarely from objects such as clothing or bedding.
The most memorable and emotionally powerful dreams happen during the REM (rapid-eye movement) phase of sleep, which is the stage of sleep when our brains are most similar to a wakeful state.
Rapid eye movement sleep has since its discovery been closely associated with dreaming. Waking up sleepers during a REM phase is a common experimental method for obtaining dream reports; 80% of neurotypical people can give some kind of dream report under these circumstances.