there's always something that makes no sense to be afraid of, yet you fear nonetheless; a phobia that your mind tries to understand, yet can't in the waking hours so randomly, it analyzes it while you sleep. these are nightmares, if you have a fear of great heights then you might have a nightmare of being stranded on a giant mountain, and this is just your dream telling you "why are you afraid of great heights?". of course, some are more rational than others, such as the fear of being alone, while others are so potent that they turn into night terrors, or nightmares that breach the waking world temporarily after you wake up. you might also have a nightmare from stress, the "fear" of not passing your test makes you dream of that test in bad scenarios, or your boss denying your vacation request and thus, you can't go on that family camping trip.

of course, this is all just for humans. for pokemon it might be different. perhaps their dreams are mixed with their innate powers, ergo a low-level fire type might dream of using Flamethrower, or they dream to specifically analyze what happened recently. i wonder what Malachi and the rest of team Maelstrom are dreaming about...

Malachi is in a middle of a nightmare. Not sure about the others.