What turned Faolain to the Nightmare?
“what they found” may not refer to a physical object or creature. The way I interpreted it I think they found something about the world or themselves, a great darkness in the soul so to speak. That’s just how I took it.
(edited by Yata.8932)
I believe this
http://www.arena.net/blog/dream-and-nightmare
might answer your questions
usually somewhere