Freudian Concepts? In My Literature?

There is one excerpt from the Sigmund Freud reading that provided some food for thought: "The achievements of condensation can be quite extraordinary. It is sometimes possible by its help to combine two different latent trains of thought into one manifest dream, so that one can arrive at what appears to be a sufficient interpretation of a dream and yet doing so can fail to notice a possible 'over-interpretation'." With this in mind, I think of several works of literature that fall in perfectly with this notion that Freud presents in this passage; the notion that literary characters can create two different images of themselves and portray them accordingly throughout the story, creating the ultimate reality of that one character within the story.
I feel that this idea of "two trains of thought arriving at one manifest dream" is prevalent not only to the relationship between fictional characters within a story, but to the relationship between the reader and the writer that is developed through the power of imagery. The writer develops an image of their very own, based upon their own reality even if that particular story to be is a complete fantasy piece. The writer then takes these images and transcribes them to the written word, which is then read by another party and said party develops their own image of the vision that the writer initially had. This image could be completely different amongst the writer and the reader.
This seems like the idea that Freud tried to express in his work. Two ideas, no matter how similar or different they could be, could combine to create a reality.