Where Do Your Characters Come From?

As a reader, do you ever wonder if the author has based any of the characters on themselves? Or did they base them on a friend or relative?
As an author, where do your characters come from?
Is it a friend., or maybe someone you work with and don't like? What about a relative? Or maybe you saw someone on the street and jotted down a few notes and they become a secondary character in your book.
Did you see a character on TV and adapt them to your book?
I find most of my characters in my mind as I'm waking up in the morning. When I go to bed I think about the character I want to write and the plot. Who would fit?
Sometimes I find a character in a newspaper article and think - "Oh, I'd like to make him a villain in one of my story's." I write everything I think I need and save the info until I have a story he'll fit in to.
And I admit to including people I worked with who I disliked and I put them in a book as an unpopular secondary character and maybe killed them off.
Are any of my characters based on me?  I think I'll pass on that question.
What about you?
What are your thoughts or questions on the characters you read about?
Where do your characters come from?
And I wrote this from my point of view - contemporary. What about those who write historical or sci-fi? Where do your characters come from?