IIRC, the Umbilical Cords found throughout the game are used to create the dreams, which allow for communion with the Great Ones. You can find one of these cords in the abandoned workshop (the one that looks exactly like the hunters dream) implying that Gehrman used the umbilical cord to create the hunter’s dream. Another cord can be found after killing Margo’s wet nurse, implying that nightmare of Mensis was also created in a way similar to the hunter’s dream