To dream that you are homosexual (but you are not in your waking life), represents a union with aspects of yourself.

It is symbolic of self-love, self-acceptance, and compassion.

If, in your dream, you are not comfortable with homosexuality, then it suggests some fears/anxieties about your masculinity (if you are male) and femininity (if you are female). You may be experiencing some insecurity in your relations with the opposite sex.

On a side note, it is common for expectant fathers to have dreams of homosexual encounters.

If you are homosexual in your waking life, then the dream is simply a reflection of your own self.