When a human dreams does the brain activate the cones and rods in the eyes creating the images we see in dreams?
The cones and rods would not contain the images from our dreams. Visual scenes get transferred from the eye to the thalamus (which serves as a relay to the cortex) by optical fibers that are overwhelmingly uni-directional (information is carried from the eyes to the thalamus and not vice-versa).
Dreams do, however, activate the thalamus, the visual cortex, and the visual regions that control eye movements (see refs 1,2). I don't believe there has been successful attempts to decode the activation, mainly, I think, because fMRI would be the best that we could use for humans and it does not have good temporal or spatial resolution.