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Source: https://writers.stackexchange.com/a/38655
License name: CC BY-SA 3.0
License URL: https://creativecommons.org/licenses/by-sa/3.0/

My two favorite depictions of nightmares in fiction are the [Nightmare Song](https://www.youtube.com/watch?v=71BXaf0x5hA) in Iolanthe and Harry's nightmare in Sorcerer's Stone:

> Perhaps Harry had eaten a bit too much, because he had a very strange dream. He was wearing Professor Quirrell’s turban, which kept talking to him, telling him he had to transfer to Slytherin at once, because it was his destiny. Harry told the turban he did not want to be in Slytherin; it got heavier and heavier; he tried to pull it off but it tightened painfully–and there was Malfoy, laughing at him as he struggled with it–then Malfoy turned into the hook-nosed teacher, Snape, whose laugh became high and cold–there was a burst of green light and Harry awoke, sweating and shaking. He rolled over and fell asleep again, and when he woke the next day, he didn’t remember the dream at all.

The point is that nightmares are weird, and almost universally readily identifiable once the dreamer wakes up.

Which is not to say that realistic seeming dreams aren't done all the time to add drama to the story. But a dream which is indistinguishable from reality is unrealistic, which is why most sequences like to start with a reasonable scenario that, as the scene progresses, gets more and more bizarre and unrealistic until the subject wakes up and figures out what's going on.

The other thing you can do is to use the nightmare to illustrate that your main character is becoming increasingly disturbed. The fact that your character isn't identifying the discrepancies that indicate that the dream isn't real can be an indication that he's losing his ability to distinguish reality from imagination. For this to work there needs to be clues that the dream is a dream, because if the reader can't figure out that the dream is a dream then they won't pick up on the instability of the character.

Original score: 2