The DREAM (Dp/Retinoblastoma(Rb)-like/E2F/MuvB) transcriptional repressor complex acts as a gatekeeper of the mammalian cell cycle by establishing and maintaining cellular quiescence. How DREAM's three functional components, the E2F-DP heterodimer, the Rb-like pocket protein, and the MuvB subcomplex, form and function at target gene promoters remains unknown. The current model invokes that the pocket protein links E2F-DP and MuvB and is essential for gene repression. We tested this model by assessing how the conserved yet less redundant DREAM system in Caenorhabditis elegans is affected by absence of the sole C. elegans pocket protein LIN-35. Using a LIN-35 protein null mutant, we analyzed the assembly of E2F-DP and MuvB at promoters that are bound by DREAM and the level of expression of those "DREAM target genes" in embryos. We report that LIN-35 indeed mediates the association of E2F-DP and MuvB, a function that stabilizes DREAM subunit occupancy at target genes. In the absence of LIN-35, the occupancy of E2F-DP and MuvB at most DREAM target genes decreases dramatically and many of those genes become upregulated. The retention of E2F-DP and MuvB at some target gene promoters in lin-35 null embryos allowed us to test their contribution to DREAM target gene repression. Depletion of MuvB, but not E2F-DP, in the sensitized lin-35 null background caused further upregulation of DREAM target genes. We conclude that the pocket protein functions primarily to support MuvB-mediated repression of DREAM targets and that transcriptional repression is the innate function of the evolutionarily conserved MuvB complex. Our findings provide important insights into how mammalian DREAM assembly and disassembly may regulate gene expression and the cell cycle.