Hello and hope you are doing well.
During sleep, the body cycles between non-REM and REM sleep. Typically, people begin the sleep cycle with a period of non-REM sleep followed by a very short period of REM sleep. Dreams generally occur in the REM stage of sleep.
A lot of studies are going on to study the importance of REM sleep, which is the dream phase of sleep. Psychologists generally agree that achieving the dream state of sleep is a critical element for maintaining good mental health. Conversely, depriving ones self from dreaming can cause a number of adverse health problems, including fatigue, reduced immune system efficiency, heart disease and mental health issues including delusions and severe cognitive reasoning deficits.
Disorders related to dreaming could occur with REM sleep behavior disorders. Here the person acts out the dreams. This is diagnosed with a sleep study. Please consult your primary care physician if problem persists.
Hope this helped and do keep us posted.
I have almost the same experience.. I've seen my nephew at night when I was a child, but his face was defaced with an evil smile (He was standing staring at me from behind a wall along with other 2 little girls, also defaced.. And if I'm not wrong, they were wearing red). But before I saw him in the dark in my mother's room, it started with a dream, and for me, 99% of the time I see those things, it starts with a dream, a nightmare. I would woke up from the dream and see things, and they would fade away slowly after a while. I'm 20 years old student, male, and I've been seeing those things for more than 12 years now.
*I slept in my mother's room that night because other unusual things happened to me that night in my room. In other words, it was a nightmare in real life.