Nightmare Beasts are legit. Usually they can't cause anymore harm than nightmares. Which, depending on the mind, CAN be pretty horrible, but that can be dealt with.

I don't know if this is a god. Nightmare was just a doctor who happened to figure out where 'Dream Weaver' came from and figured the other people involved in the same experiment could be useful.

Who said there was a god? If it was Roxie, it might be true.

Still, if something is drawing in Nightmare Beasts, there's cause to be concern. Nightmare was making dreams come alive when he was drawing them in.