When I noticed my previous Beagle's paws twitching slightly I assumed he was dreaming. Pikey, my recently rescued Beagle is different. When he gets on the bed, he immediately goes to sleep and seems to be having very intense dreams. The first thing I noticed was a sound that turned out to be his tail thumping on the bed. All four paws were moving and he was having fairly violent body movement and making little sounds like maybe he was barking. He didn't seem to be in distress and it looked like he might be dreaming chasing something. One thing that is alarming is that sometimes he rolls over on his back, legs in the air and still dreaming. Now and then, I shake him and wake him up but basically I just let him continue the dream. Later on, he settles down and is almost motionless for the rest of the night. I don't know his background but he may have had some bad experiences before being turned over to the shelter.
Callie pretty much goes to sleep for the night and he's out. Sophie will go so far as leap to her feet barking, but she twitches and paws the covers as well.
Mouse runs on his side growls and barks in his sleep. Funniest thing is when he big boy barks in his sleep and jumps up looking around like "who the hell was that"? He has gone so far as to inspect the entire house and the front and back yards before coming back to bed.
Dogs, rats, cats and some birds are similar to to human beings when it comes to sleep patterns and brain wave activity. So yes dogs do dream! Small dogs dream more than larger ones, but their dreams tend to be shorter than their larger counterparts. But because we can't ask them what their dreams are about we can only presume they're a replay of the day's activities such as playing or chasing cats!
I actually queried Pereg's myoclonic jerking during her sleep with my Vet because of her condition [the slightest movement or sound from her instantly wakes me to check on her], and according to him dogs dream and even though we do not know what they are dreaming about, some dreams cause these myoclonic jerks and twitches - and the dog can also be quite vocal. But as he said, humans also sometimes jerk and twitch when they are dreaming, as anyone who has ever had a partner will know what it is like when their partner suddenly kicks out in their sleep! If Pikey does this frequently I would talk to your vet about it, just to be on the safe side, because as you say, you do not know what his background is.
I think most of my dogs have been dreamers - I love watching them, trying to work out what they are about. They do not seem to necessarily be related to that day's events. Eddie dreams the most - he runs and chases, does little puppy 'yips', and occasionally growls. I only wake him if he starts to make, 'I'm scared' noises, but I sometimes wonder if I shouldn't be letting him process even those thoughts naturally, in the same way that we humans do.
Izzy dreams quite often. Usually she just twitches a little but occasionally she will bark, never enough to wake herself up though. Very rarely she will make sucking noises like a puppy. She is very cute when she dreams... =)
