How exactly does Lucid Dreaming work?

When you Lucid Dream do you literally induce dreams or is it simply that you become more aware of what your dreaming about. I look at dreams more as a way of telepathic communication, or way to have visions, not a way to always simply dream for fun. May someone share any information on this? Regarding how dreams, lucid dreams, and Extra Sensory Perception (ESP) correlate with each other. Thanks.