Several speculative and yet untested hypotheses suggest that endogenous DMT is produced in the human brain and is involved in certain psychological andneurological states. DMT is naturally occurring in small amounts in rat brain, human cerebrospinal fluid, and other tissues of humans and other mammals. A biochemical mechanism for this was proposed by the medical researcher J. C. Callaway, who suggested in 1988 that DMT might be connected with visual dream phenomena: brain DMT levels would be periodically elevated to induce visual dreaming and possibly other natural states of mind.A new hypothesis proposed is that in addition to being involved in altered states of consciousness, endogenous DMT may be involved in the creation of normal waking states of consciousness. It is proposed that DMT and other endogenous hallucinogens mediate their neurological abilities by acting as neurotransmitters at a sub class of the trace amine receptors; a group of receptors found in the CNS where DMT and other hallucinogens have been shown to have activity. Wallach further proposes that in this way waking consciousness can be thought of as a controlled psychedelic experience. It is when the control of these systems becomes loosened and their behavior no longer correlates with the external world that the altered states arise.
Dr. Rick Strassman, while conducting DMT research in the 1990s at the University of New Mexico, advanced the controversial hypothesis that a massive release of DMT from the pineal gland prior to death or near death was the cause of the near death experience (NDE) phenomenon. Several of his test subjects reportedNDE-like audio or visual hallucinations. His explanation for this was the possible lack of panic involved in the clinical setting and possible dosage differences between those administered and those encountered in actual NDE cases. Several subjects also reported contact with "other beings", alien like, insectoid or reptilian in nature, in highly advanced technological environments where the subjects were "carried", "probed", "tested", "manipulated", "dismembered", "taught", "loved" and even "raped" by these "beings". Basing his reasoning on his belief that all the enzymatic material needed to produce DMT is found in the pineal gland (see evidence in mammals), and moreover in substantially greater concentrations than in any other part of the body, Strassman ( p. 69) has speculated that DMT is made in the pineal gland. Currently there was no published reliable scientific evidence supporting this hypothesis. Until Rick Strassman published his data showing DMT found in the pineal glands of live mice.
In the 1950s, the endogenous production of psychoactive agents was considered to be a potential explanation for the hallucinatory symptoms of some psychiatric diseases as the transmethylation hypothesis (see also adrenochrome), though this hypothesis does not account for the natural presence of endogenous DMT in otherwise normal humans, rats and other laboratory animals.
In 2011, Nicholas V. Cozzi, of the University of Wisconsin School of Medicine and Public Health, concluded that INMT, an enzyme that may be associated with the biosynthesis of DMT and endogenous hallucinogens, is present in the primate (rhesus macaque) pineal gland, retinal ganglion neurons, and spinal cord. In August 2012, Steven Barker, Ethan McIlHenny, and Rick Strassman, developed a new method to measure the three known endogenous hallucinogens and their major N-oxide metabolites in blood, urine, cerebrospinal fluid, ocular fluid and/or other tissues by using state-of-the-art liquid chromatography-mass spectrometry (LC/MS) equipment. For the first time in history, they were able to detect the DMT-N-oxide metabolite in blood and urine.