Hi C.,
Two year olds can have bad dreams. But, what does she do when you go to her? Does she respond to you or does she seem to ignore you? If she seems to ignore you, she's probably having "night terrors", which is very common in the preschool years. My son is 6 & every once in a while he still has them. They can be scary to you, but they don't seem to affect the kids much. It's like a form of sleepwalking. Look it up on the internet to get ideas on how to handle it when it happens, as you can't stop it completely. With our son, we walk him to the bathroom, pull down his pants (as he is too out-of-it to do it himself)& have him go potty. When we put him back to bed after that, he sleeps through the rest of the night.
If on the other hand, she's able to talk & respond to you at night, she's probably having bad dreams & you can try to find something that will soothe her like a teddy bear or a night light or some soft music playing. We like the Veggie Tale song, "God is bigger than the Boogie Man". It's very reassuring to my son when he gets to feeling scared. If it's just bad dreams, you can also talk to her in the morning about how dreams are not real & start telling her about some of your (rated G) dreams to help her understand that everyone has dreams. If it's night terrors though, talking to her in the morning won't help because she won't remember anything about what happened in the night.
Good Luck!
C. : )