Dreams CAN be horrific, but they seem to be erased.
There have been many times I’ve told someone about a dream I had when it was still morning, and later in the day I remember nothing about it until the person I told reminds me.
There have also been times when I remember a dream at odd and random times. Even a dream I had long ago, though initially unremembered.
Although dreams are from the subconscious I really don’t think they re-enter the subconscious in the same way Post-Traumatic Stress does. A horrific dream is more likely to be caused by post traumatic stress, even if it has morphed into far more horrific form.