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The Ojibwa (Chippewa) are the original creators of the dreamcatcher, although many other tribes have their designs and stories too.
The dream catcher is hung above where you sleep. There it can catch dreams as they move in the night air. The good dreams know their way, and pass through the hole in the center, and slide down the feathers to the person sleeping below. The bad dreams don’t know how to find the hole so they get caught in the web and are destroyed at the first light of the morning sun.