Ours all do it, even Bimmer, who's a grown dog now. Bear, the German Shepherd/Akita mix who shared my life for years, would even run in his sleep. He'd be laying on his side, legs churning just like he was running. Every now and then he'd even stretch them out like he was jumping over something.
Kharma and Shiva both do it. Their paws twitch and their legs will flail around like they're running or playing. They'll whine and yip, and Shiva will make her noises like Chewbacca, from Star Wars. Generally it wakes Bimmer up and he gives them 'the eye' and moves far away from them.