A rag is cloth that has lost its first use but still serves, so tradition reads it as humility, wear and making do. Dressed in rags, a dreamer is often read as feeling undervalued or stripped of status.
When this appeared in your dream, what were you feeling?
My Cosmic Code has a private dream journal. Write a dream down and the app picks out the symbols in it, shows what dream books say about them and, over time, which words recur across your entries. The journal is stored on your device only.