The stages of sleep can be broken into two broad categories: non-REM sleep and REM (Rapid Eye Movement) sleep. Non-REM sleep can further be broken down into Stage N1, N2, and N3. The way that sleep scientists divide sleep into stages has changed several times since the categorization of sleep stages began in the late 1930s. The stages were first described in 1937 by Loomis et al, then updated in 1957 with the discovery of Rapid Eye Movement, the deepest period of sleep, where almost all memorable dreams occur. An update in 2007, laid out in The AASM Manual for the Scoring of Sleep and Associated Events, published by the American Academy of Sleep Medicine (AASM), merged the third and fourth stage of sleep, leaving only a third stage.
The stages of sleep are classified using a variety of means, including measurement of EEG waves (colloquially known as "brain waves"), physiological indicators, and subjective reports. N1 is defined mostly as the transition of the brain from alpha waves (with a frequency of 8 to 13 Hz, common to awake people) to theta waves (with a frequency of 4 to 7 Hz). N1 is on the borderline between sleep and waking, known as "drowsy sleep" or somnolence. Common to this stage are brief, involuntary twitches known as hypnic jerks, as well as hypnagogic imagery, which can include phosphenes (fuzzy colorful splotches) or form constants (patterned mental imagery).
The second of the stages of sleep is N2. The characteristic signs of N2 sleep are "sleep spindles", 0.5-1 second EEG jumps of 12-16 Hz waves, and "K-complexes", brief voltage spikes on the EEG that last for a similar length of time and follow sleep spindles in bursts. K-complexes are known to occur randomly throughout N2 sleep, but also occur in response to auditory stimuli, for instance if someone knocks on the door of a sleeping person. During N2, conscious awareness of the external environment disappears and the muscles relax. N2 makes up about half of sleep time in adults.
The third of the stages of sleep is N3, or slow wave sleep (SWS). Slow wave sleep is characterized by delta waves, (0.5 to 4 Hz), also called delta rhythms. Unusual sleep effects, called parasomnias, occur at this stage, and include night terrors, bedwetting, sleepwalking and sleep-talking. If deprived of sleep, a person lapses into N3 and REM sleep very quickly, which suggests that both are essential.
The last stage of sleep, officially considered a part of N3, is the most famous stage of sleep, known as REM sleep. REM sleep is where dreams occur and the eyes shift around rapidly, likely tracking dream-objects. Most dreams are forgotten, even during REM, but most people at least vaguely, if not vividly, remember the presence of dreams during REM sleep.