I second Mnemosyne’s theory about how things look different in the dark, particularly the half dark. There were a couple of pictures in my room that scared the shit out of me at night. During the day I would plead tio keep them but after a few disturbed nights my parents took them away.
I also wonder if all these elaborate rituals for scaring away the “monsters” might not do more harm than good. Do they not reinforce the idea that monsters exist? And if they can be banished can they not come back – they always do in horror films – and nightmares-- after all.
This was my first thought. It may be impossible for the child to articulate the problem. I’ll give 2 examples of things that he wouldn’t understand.
One is Claustrophobia. I had one episode in my teens and possibly one when I was 3. I woke up in a state of extreme duress. It’s impossible to describe unless you’ve been through it but it is a feeling of total dread. Both episodes were triggered by dreams but I didn’t specifically link them to the dreams at the time. I’ve since had a dozen or so episodes as an adult and recognized the dreams as claustrophobic. I was able to link the ever increasing claustrophobia of the dreams to the fact that I was having trouble breathing. I now recognize the dreams for what they are and wake myself up. Keep in mind that no amount of talking is going to immediately alleviate a panic attack but getting the child to focus on something pleasant is the direction to head.
The second thing that could frighten a child is sleep paralysis. I’ve been aware of this phenomenon all my life and it has never scared me because I learned immediately how to shake it off (literally). There are a few muscles that still move a little and I exercise those until I’m fully mobile again. This scares adults who never experienced it before.