I recommend the 'move forward' approach. Explain things as they become important to the characters and the current plot situation. Some background info here and there adds up quick.
Hi Kammy. I felt the need to respond because I just struggled for quite a while with what sounds like practically the same exact situation. My main character's entire story arc stems from the actions of one of his distant ancestors. Initially, I began with a prologue. Two things happened. First, the prologue ended up being too long. While I have nothing against prologues, I didn't want to spend too much time with a character who wouldn't be carrying the story. Second, readers to whom I gave the draft simply felt that the first chapter was more engaging than the backstory in the prologue, so I decided that I would need to rethink things. I like the dream/nightmare idea, depending upon the genre. Regardless of genre, dreams are great for foreshadowing, but in my opinion, exposition in dreams is better left to supernatural/fantasy stories. I solved my problem with a multi-pronged approach. I used dreams/visions a bit, but I also identified a character to act as somewhat of an historian...someone whom the main character could rely upon to fill in the blanks regarding his ancestor's past. A third method might be the idea of artifacts like letters that can tell a story. A letter or other piece of writing can be a good catalyst for leaving the main story for a bit.