Lissitzky persuades Freud that the modern house should have only one level with horizontal divisions, i.e. it should follow horizontal rather than vertical development. They discuss how to implement the concepts of condensation and displacement via mobile walls, an extension of Lissitzky's design for the exhibition pavilion which he did in Dresden in 1926.[3]

Around the same time Russian filmmaker Sergei Eisenstein happens to pass through Vienna and he meets with Freud and Lissitzky. He tells them that he is planning film "adaptation" of Marx's Capital. Eisenstein is having difficulties with realizing his film project in Russia; however, there is funding for the mass housing projects in Vienna. Eisenstein realizes that he can try to test his ideas by "displacing" Capital into Interpretation of Dreams. He convinces Freud and Lissitzky to commission him to do a short film which presents a "walk through" through the model of a house.[4]