My hunch (based on my personal experiences) is that these occur in different phases of sleep.

I find that while I am falling asleep, I often have indescribable nonsense "hallucinations" (I hesitate to call them that because it makes them sound a lot more cohesive than they really are) that feel almost like random noise. These are not just sensory hallucinations, but also logical hallucinations: I have thoughts and beliefs that make so little rational sense that I don't know how to describe them.

But later on I will have complex dreams with coherent characters, plots, etc., and have an inner sense of logic (even though it is dream logic) that I can describe after I wake up.