This is quite a common dream and people often assume it's to do with death when they wake as the figure can bear a resemblance to the grim reaper.
Dreaming of a hooded figure can actually mean that you are buying yourself more time to complete a project or endeavour in your waking life. Perhaps you are hiding away or delaying doing something because you feel it needs more time invested in it. It's possible you don't think you have the space in your life to complete it to the best of your ability or indeed at all. It might be wise to ask for help or adjust your plan so it's more manageable.
You may feel threatened by the hooded figure in your dream- just as you may feel threatened by an aspect of your personality that you keep withdrawn and it's beginning to create a problem for you. Perhaps it's time to look at this part of yourself more closely rather than ignoring or suppressing it. Can you talk to someone? A friend, partner or family member or even a professional?
You may also feel that you are being deceived by someone close to you and your trust for that person is being tested as a result. Be careful who you open up to and let into your life as they may not be what they seemed.
If you have a secret that you've been keeping or protecting from those closest to you- this could also be a sign that you are shying away either emotionally or socially. Is this secret worth jeopardising your relationships for?
Source: The Complete A-Z Dictionary of Dreams by Ian Wallace
Tagged in Dream Interpretation