I think it's just adapted from pain that you have felt before. Say if you have tasted caulliflower but not broccoli, and you eat broccoli in an LD, then you will most likely taste caulliflower, it's not the same, but it is the most similiar. The thing about pain is that it's all the same, it's just in a different area and more or less severe. So being stabbed with a knife would probably just feel like a thin piece of metal being shoved into you and then lots and lots of pain. Your brain doesn't totally rely on experience.

From what i've experienced and heard, your brain always implys the laws of physics in your dreams, unless you are in an area that doesn't require it like space, or you are on earth and you are LDing and you make it zero gravity or something. A good thing to test in an LD would be getting an injection, i hate them so i might experiment with that tonight.