Depression does not prevent dreaming however it has been shown, in many studies, that the length of time spent in REM is shorter in clinically depressed individuals. You can learn more about it here: http://www.rjews.net/v_rotenberg/rem_sleep_latensy.html
If you suffer from depression, you should know that your dreams can warn you that another bout is on it's way. I know this from my own experience as well as my own research. You want to look for dreams of rain, flooding, more shades of grey and less color, mud and dirt, falling, as well as dark shadowy creatures that seem to be lurking just under the surface of any water in your dreams. Also, if the color blue begins to stand out in your dreams this too can point to depression, the blues, so to speak.
These are the more commonly experienced symbols of depression. You may have your own symbols that are personal to you. Start keeping track of your dreams along with your days and you will begin to notice your own personal patterns and symbols that are letting you know a depression is on the way. This will allow you to prepared so you can make sure you surround yourself with people that are positive and that make you laugh, or you can go see a good comedy, etc. so that you can combat that nasty depression and keep yourself in good spirits.
Depression does not prevent dreaming however it has been shown, in
many studies, that the length of time spent in REM is shorter in
clinically depressed individuals. You can learn more about it here:... More