When you die in your dreams you do not, in fact, die in the real world.

We can blame "Nightmare on Elm Street," I think, for the perpetuation of this urban myth/old wives' tale.

I've had the 'falling and wake up before you land' dreams, but can't recall ever actually dying in a dream - until last night.  Some variation of a drug deal gone bad scenario ended with a gun being put to my head and getting shot point blank in the left temple [weird what you remember.]  In the dream there was the immediate fade to black/death and a quick cut into a completely different dreamscape.  At which point I woke up and said "Hey, that's new."

Dream Moods Dictionary: Words That Begin With D:

"To dream that you die in your dream, symbolizes inner changes, transformation, self-discovery and positive development that is happening within you or your life. You are undergoing a transitional phase and are becoming more enlightened or spiritual. Although such a dream may bring about feelings of fear and anxiety, it is no cause for alarm as it is often considered a positive symbol. Dreams of experiencing your own death usually means that big changes are ahead for you. You are moving on to new beginnings and leaving the past behind. These changes does not necessarily imply a negative turn of events. Metaphorically, dying can be seen as an end or a termination to your old ways and habits. So, dying does not always mean a physical death, but an ending of something.meanings by DreamMoods.com

On a negative note, to dream that you die may represent involvement in deeply painful relationships or unhealthy, destructive behaviors. You may feeling depressed or feel strangled by a situation or person in your waking life. Perhaps your mind is preoccupied with someone who is terminally ill or dying. Alternatively, you may be trying to get out of some obligation, responsibility or other situation. You are desperately trying to escape from the demands of your daily life."