“The process of shifting and rearrangement which replaces material of psychic significance by material which is indifferent (whether one is dreaming or thinking) has already taken place in these earlier periods of life, and has since become fixed in the memory. Those elements which were originally indifferent are in fact no longer so, since they have acquired the value of psychologically significant material.” (The Interpretation of Dreams, Chapter V)
All the cases of replacement in Diane’s dream reflect her attitudes towards the characters featuring in her fantasy, and all of those cases become clear in the course of the final, “real”, part of the film, mostly during the episode of Adam Kesher’s party.
For the whole dream, Diane replaces herself by Betty Elms, using the name of a pretty blond waitress she saw in a restaurant; the real Betty Elms is full of energy and blooming beauty, the things that the real Diane evidently lacks. Diane’s “Betty” is also a perfect example of Freud’s idea of the “Super-I” (the ideal “I”): the identification of oneself with someone whose qualities are lacking in one’s own personality. This lack is usually what prevents one from having a perfect impression (or image) of oneself.
Not wishing to admit her own guilt, Diane replaces herself (as a murderer) by a mafia-subplot, also assigning a completely different meaning to the words “this is the girl”. In Diane’s fantasy, these words turn out to be an instruction to the film director to choose a particular actress for the leading role.
The real Camilla Rhodes is thus replaced by a young blond movie star, who, in the real version of events, turns out to be a new lesbian lover of Camilla. By such replacement, Diane gives way to her hatred towards the young actress: Diane makes her a marionette in mafia’s hands, which implies her lack of will, and, most probably, of any artistic talent.