Are the characters in your dreams conscious?

A few weeks ago I wrote a post explaining why you are probably not living in a simulation. One of the reasons I gave was that a simulation of a person probably wouldn't have its own individual consciousness, but you know good and well that you are conscious. I was just thinking that when you dream, your brain is basically running a simulation. There are characters in your dreams that walk and talk as if they were real people. But they don't have their own individual consciousness, so this seems to be evidence that a simulation in a computer probably wouldn't be conscious either. Just as a person in your dream is a mere representation, so also a simulated person in a computer would be a mere representation.