Also known as w-nightmare hallucination and nightmare. The term waking-nightmare hallucination was proposed in or shortly before 2003 by the Canadian psychologist and sleep researcher James Allan Cheyne to denote a *hypnagogic or * hypnopompic hallucination of a frightening nature that may occur during episodes of * sleep paralysis. As Cheyne argues, the term waking-nightmare hallucination seeks to reinstate the prototypical, 19th-century referents of the term nightmare. The term nightmare was rejected by him on the grounds that during the first half of the 20th century it came to refer to prolonged, frightening dreams from which the dreamer would typically awake.
References
Cheyne, J.A. (2003). Sleep paralysis and the structure of waking-nightmare hallucinations. Dreaming, 13, 163-179.
Dictionary of Hallucinations. J.D. Blom. 2010.