Nightmare

Unpleasant, even terrifying dream that occurs in REM sleep.  Nightmares trigger a range of emotional response including fear, anxiety, anger, and sadness.  The etymology of the word reflects a series of shifts in its meaning.  Around 1300 a nightmare was "an evil female spirit afflicting sleepers with a feeling of suffocation,"  a compound of "night" and "mare"-- Old English for a goblin or incubus that sits on the chest of the sleeper.  This was also known as "Old Hag Syndrome," where the nightmare was personified as an old woman suffocating the sleeper.  "Old Hag" may have come from the phenomenon of REM muscle paralysis, which, if dimly perceived by the sleeper, can give rise to dreams of being unable to move in the face of danger.  In the mid-16th century, the meaning of "nightmare" shifted from the demon to the dream it causes. 

Sources:

"Nightmare," Online Etymology Dictionary 

Caldwell, Sleep