You wake in the middle of the night, heart pounding, the echo of a cry fading away. The cry starts up again and your groggy, sleep-deprived brain understands that a toddler's bad dreams are a nightmare for parents, too.

Just as adults need to dream in order to work through their fears and hopes, toddlers between the ages of one and three need to discharge anxieties and experience pleasures in the same way. The good news is the development of dreams is an outcome of an improved memory and a growing imagination. The bad news is it can make for some disrupted sleep for the whole family.

Janie's 2-year-old daughter, Beth, wove a tale about a fire raging through her bedroom. "My hand got burned last night when my room was on fire." Her hand was in perfect condition; her room, while messy, was without fire damage. A casual "It was just a dream" from Janie comforted Beth.

Megan, now 13, still remembers her epic nightmare adventure in the big dark house with monster spiders. Her need, as a 2-year-old, to talk extensively about this bad dream over the following week, and periodically over the next two years was a healthy response to a full-blown night fright. The talk defused the terror.

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