The obvious answer the reader is being led to, here, is you're working with a repressed memory. Your mom is trying to protect you (or your father) from it. You should find a therapist and report it.
A strong visceral response to reading a rape account is normal, particularly for a girl. It's a horrible thing to endure. It's a horrible thing to think about, even. It's horrible enough I don't want to think about it to answer you. So, yeah, crying is normal.
Dreams are funny things. Sometimes they tell you what you need to know. Sometimes they show you what you fear. Sometimes they are residue from the day.
Did the dreams start before you heard the friend's story or after?
Did your mother leave your father or did he leave her?
Have you seen him more recently than when you were younger?
Are these dreams recurring - as in the same dream with the exact same detail and sequence of events happens?
First off. Don't panic. There are a lot of reasons why you may dream your dreams.
From the information you've given, I don't think it's possible to answer your question. So, you may have been sexually abused or you may not have. In other words, it's normal to have a strong reaction to a resurfacing repressed memory. And It's just as normal to have a strong reaction to rape in general.
"He loves you very much, so he would never hurt you." is a really dumb thing to say. People who love you can hurt you. Love and hurting are not mutually exclusive.
Perhaps you could describe your mother's reaction to your question in a little more detail. Did she seem as if she were hiding the fact that she threw him out after finding out he hurt you or did she seem like he genuinely is an ok guy just not right for her?
I think, though I do not know for sure, that repressed memories come back to you in snippets, and more often at waking moments at the point of some trigger event.
One thing that may be worth mentioning: At the point you wholeheartedly believe your dreams to be true events, you do need to seek counselling. Talk to your counselor at school or your doctor. Be aware that there are cases where patients have discovered repressed memories which turned out to be false memories, and believing a thing has happened that did not happen can cause quite a nasty emotional scar for you, as well. Not to mention, it can take years to repair bridges you tear down with false accusation.
I have seen estimates as high as 67% of all women have experienced some form of sexual abuse during childhood. It is not outside the realm of possibility that you have experienced some kind of abuse from your father, but based on the information given, your question cannot be answered with a simple yes or no.
I really don't want to monopolize the responses here, but I want you to start sorting this out as fast as you can. I know it's worrisome to consider at all. And I forgot the important question at the end: What do I do?
Another thing for you to think about is that there is a lot of information on the internet that is useless. I think this forum is a good place to start asking questions, particularly because there is some professional interest and commentary in the content, and also because most posters seem to be driven to give useful responses.
You may consider reading this article by Elizabeth Loftus which addresses the questions:
(a) How common is it for memories of child abuse to be repressed? (b) How are jurors and judges likely to react to these repressed memory claims? (c) When the memories surface, what are they like? and (d) How authentic are the memories?
Unlike yahoo groups answers or special interests sites, this is a scholarly article covering your topic. It is as unbiased as you are likely to find and based on current research and evidence rather than conjecture.
I suggest you read it and then think about it for a few hours or few days to let it digest. And then ask yourself again ... why am I having these dreams about my father?