I find it highly implausible that many people believe fetusus are "not alive". You might be referring to the widely held position that an early-term fetus isn't sufficiently developed to be considered a full-fledged human, and that any rights it might have don't outweigh those of the mother who is carrying it?
I've found that "fetuses aren't alive" is a common talking point espoused by people who aren't comfortable sitting in a moral gray area and want an simple excuse to resolve their cognitive dissonance. It's common enough that I can't help but wonder if that is the reason people are so resistant to the idea that fetuses might dream. It seems remarkably similar to "farm animals can't feel pain". A transparent fib people tell themselves to feel better about their positions. Incidentally, I eat meat and I am pro-choice.
Maybe so, though this too seems like a strange belief, and touches on the reason I find surprise at such things odd: it's been known for years that fetuses at late stages have cycles of REM sleep and apparent wakefulness.