Creativity Sleep

I would like to hear people's experiences and thoughts about this phenomenon:

Sometimes, while reading a book in bed, I fall asleep, but continue "reading" the book. I read a few pages, and have a very vivid picture of the characters and descriptions. When I wake up, I see the page at which I fell asleep, and realize I have created my own story with my own character development.

(Samuel Taylor Coleridge describes a similar experience much more beautifully here.)

This hallucination, as it appears, seems to be most effective when falling asleep immediately (almost unintentionally).

I wonder if anyone else can share similar experiences, especially if it goes beyond reading: movie-watching, story-telling, guitar-playing...

Also, if anyone knows a more widely-accepted name of this phenomenon, I'd love to do more research on it.

It has happened to me when I was around 10, 11, I used to read harry potter under the sheets, and crash, and I'd wake up remembering that I made my own plot reading, but I also recall the text got blurry as time passed in the dream.