The concern of this review is brain theory or more specifically, in its first part, a model of the cerebral cortex and the way it:(a) interacts with subcortical regions like the thalamus and the hippocampus to provide higher-level-brain functions that underlie cognition and intelligence, (b) handles and represents dynamical sensory patterns imposed by a constantly changing environment, (c) copes with the enormous number of such patterns encountered in a lifetime bymeans of dynamic memory that offers an immense number of stimulus-specific attractors for input patterns (stimuli) to select from, (d) selects an attractor through a process of “conjugation” of the input pattern with the dynamics of the thalamo–cortical loop, (e) distinguishes between redundant (structured)and non-redundant (random) inputs that are void of information, (f) can do categorical perception when there is access to vast associative memory laid out in the association cortex with the help of the hippocampus, and (g) makes use of “computation” at the edge of chaos and information driven annealing to achieve all this. Other features and implications of the concepts presented for the design of computational algorithms and machines with brain-like intelligence are also discussed. The material and results presented suggest, that a Parametrically Coupled Logistic Map network (PCLMN) is a minimal model of the thalamo–cortical complex and that marrying such a network to a suitable associative memory with re-entry or feedback forms a useful, albeit, abstract model of a cortical module of the brain that could facilitate building a simple artificial brain. In the second part of the review, the results of numerical simulations and drawn conclusions in the first part are linked to the most directly relevant works and views of other workers. What emerges is a picture of brain dynamics on the mesoscopic and macroscopic scales that gives a glimpse of the nature of the long sought after brain code underlying intelligence and other higher level brain functions. Physics of Life Reviews 4 (2007) 223–252 © 2007 Elsevier B.V. All rights reserved.