J.L.
I did a trick with my daughters when they had nightmares that worked really well. I would go into their room and talk to them for a little while. I would have them tell me about their dream and then we would change it a little bit to make it funny. If they were being chased by a bear or monster we would try to think of a very silly reason why the bear would be running that didn't involve chasing the child at all. They key was to get the child to laugh about the dream and remove all fear from the dream. Keeping them up for a few minutes would distance them from the fear and the funny story would make them chuckle when they thought about their dream instead of getting scared again.
Also, my daughter would get nightmares when she had a bladder infection. She is a deep sleeper and it seemed like her body was trying to scare her awake to go to the bathroom.