Normal brain function involves the interaction of internal processes with incoming sensory stimuli. We have created a series of brain imaging experiments that sample internal models and feedback mechanisms in early visual cortex. Primary visual cortex (V1) is the entry-stage for cortical processing of visual information. We can show that there are two information counter-streams concerned with: (1) retinotopic visual input and (2) top-down predictions of internal models generated by the brain. Our results speak to the conceptual framework of predictive coding. Internal models amplify and disamplify incoming information. The brain is a prediction-machinery. Healthy brain function will strike a balance between precision of prediction and prediction update based on prediction error. Our results incorporate state of the art, layer-specific ultra-high field fMRI and other imaging techniques. We argue that fMRI with it’s capability of measuring dendritic energy consumption is sensitive to record activity in different parts of layer spanning neurons which enriches our computational understanding of counter stream brain mechanisms.