The Nightmare Realm is a realm created completely from fear and nightmares. It is the origin of all Nightmare Poltergeists. The Nightmare Poltergeists' goal is to merge the Nightmare Dimension with every other dimension, drowning them in fear and darkness.
A fragment of the Nightmare Realm first appeared in the Dream Realm. It was used by Monkeyman to become nightmare fueled, but the plan ultimately failed. After both the Mask and Monkeyman gained full power, they devised a scheme to take over the Normal Realm. Monkeyman utilized his nightmare infested knife to absorb the power of the Mask, teleport to the Nightmare Dimension, and bring Kamek, Junior, Koopa, and Dry Bones with him. There, Monkeyman went insane with evil and released the full form of the Mask, killing himself in the process. The Mask brought pure nightmare and fear. The only option for the main characters was to pray. Just then, the characters were teleported out of the dimension as a mysterious force destroyed it.