Masturbation in a dream: what does it mean?
This is ordinary, extremely common, and turns up in dreams the way anything else in a life does, which is the whole of the honest answer.
How do the four traditions read it?
Each reading below comes from a named tradition and a cited source, so you can see where it came from and decide what fits your dream. The four often disagree, and that is the point: a symbol rarely means one fixed thing, and the distance between Freud, Jung, modern research and myth tells you more than any single verdict could.
Freud
Freud wrote about it a great deal and much of what he wrote reflects the medical panic of his period rather than his own observation. The useful part is his general point that shame attaches to acts by convention rather than by nature.
After Freud, Three Essays on the Theory of Sexuality (Brill trans., 1910), public domain.Jung
A Jungian reading would be more interested in the privacy than the act, and would ask whether the dream arranged for the dreamer to be discovered, since that is usually where the feeling in these dreams sits.
Our summary of a Jungian reading, in our own words, not Jung's. See Jung, ed., Man and His Symbols (1964).Modern
Sexual dreams are among the most commonly reported types in every large survey, and there is no finding anywhere that connects this to harm of any kind. The nineteenth century medical literature that said otherwise was wrong and was abandoned.
Our summary of the typical-dreams literature. See Nielsen et al., Dreaming 13(4), 2003, 211-235.Mythological
Traditions differ enormously and the strongest prohibitions are more recent and more local than they are usually presented as being. We would rather record that than repeat a rule as though it were universal.
Rosmerta Publishing editorial synthesis. Our own words; no quoted text.How can writers use this symbol?
The same symbol, read as craft material rather than as a dream. What it does on the page, how genres use it differently, and what happens when you turn it inside out. Written for novelists, screenwriters and poets who need the symbol to actually work, and it ends with something to try.
In literature
The subject is a reliable test of how frank a book is willing to be, and the interesting thing is how many otherwise unsparing novels quietly skip it.
Rosmerta Publishing editorial synthesis. Our own words; no quoted text.What it does in a story
It is an entirely private act, which makes it useful for showing who a character is when nobody is watching.
Genre conventions
Comic writing uses embarrassment. Literary fiction uses loneliness, which is only sometimes accurate.
How to subvert it
Write it as unremarkable, brief and followed immediately by something domestic.
Try this
Write two hundred words of a person alone in a flat on a Sunday afternoon.
Only the first of these names a source. What a symbol does in a story, how genres treat it, how to invert it and what to try are our editorial judgement as writers and editors, not findings from a body of research. They are offered as craft opinion and should be argued with.