Of course, the brain can somehow simulate emotions, because while you're dreaming whatever's happening in the dream can make you feel emotional. If you suddenly wake up, you may still feel the emotion you was just feeling.
Edit, I re-read your post.
No one understands even why we dream, but your brain can be very stupid in dreams and make mistakes like your hand warping or whatever, let alone if your brain can simulate a phone and all its crazy functions.
You're awake, trust me.