Lyric discussion by paolo10154 

Cover art for Death Dream lyrics by Frightened Rabbit

He's haunted by dreams of impending loss. He dreams that his lover will die/commit suicide.

He recounts the latest occurrence of this repeating nightmare. Now he's afraid to sleep or dream.

The repeating refrain is:

'You died in my sleep last night"

My Interpretation

@paolo10154 Paolo is right, it's "You died in my sleep last nite."

He dreamed of a loved one dying, he's telling that person about it, and how it hurt so bad he's afraid to sleep/dream again. We've all had this dream, but I've never heard it talked about so beautifully.