"저는 꿈을 꿉니다."
“I dream a dream.”
꾸다 is the verb for to dream. 꿈 is the noun form of the verb: a dream.
This is similar to another sentence in this lesson: 자다→잠 (sleep)
By adding ㅁ to a verb root, you nominalize (“noun-ify”) it. (Things get a little tricky with verb roots that end in consonants, but there are regular rules and you will probably learn them in much later lessons.)
I think that this isn't the present, it just says "I dream", and not "I am dreaming right now". The thing you are saying would be "저는 꿈을 꿉고 있어요", because it is happening right now. -고 있다 is used for actions happening at the moment of speaking. If this isn't correct, somebody please correct me.
I too am confused. I've always written "I dream" (even though it sound(ed)(s) wrong), because it never dawned that the answer was "I dream a dream"; yet I always get it right; but I just realized that there were comments, hence my being here. Some sentences DO seem inconsistent, so THAT'S confusing! ALSO, I've emailed Duolingo twice, in the last week (today's 9/24), regarding a glitch, and I've yet to hear from them! I CAN'T get past Adverbs, Lesson 3 because there's NOTHING to "select" AND the TEST OUT has the same, exact glitch; so I'm hoping someone reads this...please!!!