My dog would run in her sleep and make noises like she was barking. She had restless paw syndrome... and was running in place. Other times, she would smile and wag her tail so I kinew she had a happy dream.
Yes, I remember all of the dogs in my life doing that sort of thing in their sleep... running, barking, chasing... the cats do it too, but not so vigorously!
I know they think we are funny. I think my dog "Meatloaf" used to laugh at me. He would turn his head to one side and make a sort of gurgly hic-up sound . He would also stand at my bedroom window at night on his hind legs and "talk" to me thru the window......His bark took on the nuances of words and even sounded like he ended his sentences with periods and question marks !