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The phenomenon of condensation, according to Freud, is the result of two or more incidents of displacement. Freud viewed displacement as a form of dream-distortion: substituting an illusion for something real and substantial or a shifting of focus from something important to something less important.

An example of the latter would be someone having a bad day at work and quietly accepting the criticism of higher-ups then going home and taking out anger and frustration on family members rather than focusing on how to fix the problems at work.

Condensation is when displacements merge and fuse (or condense) together. Freud submitted that one aspect of manifest content could come to represent a number of latent elements (and vice versa) through a process called condensation. Freud proposed that condensation in dreams caused the combination of several themes or concepts into one dream symbol. A larger quantity of displaced concepts are reduced and condensed into one unified symbol.

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