Now that I've gotten the physiological requirements out of the way, let me give you an answer dealing directly with spirituality, an answer in which I have personal experience.

Lucid dreaming.

Lucid dreaming is the act of being "awake in your dream," of being aware that you are dreaming, and having the ability (to a certain extent) to control your dream.

Lucid dreams can be quite vivid, in my experience sometimes more vivid than the wakeful state. They are of value to me because they appear to be the most accessible "playground" for spiritual and creative exercises. In a lucid dreaming world (unlike our physical one) you can truly imagine anything into existence, instantly.

Lucid dreaming has many clinical, scientific applications as well. In a way, gaining control over your dreams helps you gain control over your life.

It's hard to imagine how one could focus on spiritual growth with one or more of the following problems:

It's worth looking at Maslow's Hierarchy of needs for some insight.

In the Maslow pyramid, needs at the bottom of the pyramid must be fulfilled first before needs above it can be satisfied.

In the Maslow pyramid below, notice that sleep is at the bottom, and spiritual needs are at the top.

Persons vary in the amount of sleep they need, and no pill will ever allow them to dispense with sleep entirely, for too much work is done in that state.

Sleeping could be done more effectively with two, rather than one, sleep periods of lesser duration. The conscious self would recall more of its dream adventures as a matter of course, and gradually these would be added to the totality of experience as the ego thinks of it.

As a result of more frequent briefer sleep periods, there would also be higher peaks of conscious focus, and a more steady renewal of both physical and psychic activity. There would not be such a definite division between the various areas of the self. A more economical use of energy would result, and also a more effective use of nutrients. Consciousness as you know it would also become more flexible and mobile.

Source: Seth Speaks

I have had many a enlightenment from dreams, as long as I remember the dream when I awaken it could be something that enlightens me. I have found new ways to defeat sickness, I have through examining my dreams found the flow from expectancy to experience. This shed much light on life and the Law Of Attraction. It also taught me to think in a more commanding authority mind when I want to create an experience. In other words my dreams also increased my faith, as I fought devils, demons, vampires, and the living dead, as I defeated these more and more my faith rose higher and higher to the point of now I clear houses of evil with no fear I just do what has to be done, just like in my dreams it is always what do I need to do to solve or win this.

It is the right brain connection that is freed in our dreams then when we awaken we can examine it with the filter of the left brain to learn from.

I think there needs to be a distinction between reduced sleep as a result of spiritual practice and as a means to advancing spiritual practice. Sleep is natural and, for most of us, a physiological requisite to being awake (and alive). If it so happens that one, through spiritual development, can tap into great stores of cosmic energies and thus need less or no sleep, that sounds to be a natural consequence and thus natural to them. There are plenty of validated cases of individuals not needing food or water, so given that being able to advance past the need for sleep seems plausible.

But for someone who is not at that level, trying to jump start the process by cutting back sleep sounds like a disaster waiting to happen, or at least a severe setback. Certainly the bizarre states of consciousness one could enter into with severe depravation could result in some interesting revelations (Salvadore Dali often used sleep depravation as a means to achieve the visions that inspired some of his work) but as a practice getting less sleep than your body tells you it needs would likely catch up with you in the long run.

Sleep, like any other activity, can bring much spiritual benefit if one focuses and applies himself to those ends. Dreaming aside, which I will get to, the act of recognizing sleep as a restorative process of body and mind, as a reprieve from the physical plane, as a shift in consciousness, etc, can all bolster your spiritual practice. Any act can be made sacred with intent and devotion.

Much is said of dreams, but to keep it short nearly every religion attributes at least a fraction of its basis to dreams. Because it is such a depart from the normal mode of conscious thought and still able to accomodate consciousness great experiences are possible. Questions can be answered, revelations be received, other worldly entities contacted...and so much more, all have the chance to occur every night. Not that every dream is necessarily spiritual in nature, but they are without a doubt one of the most universally accesible ways to experience the divine.