it is a nightmare... it is kinda a glimpse of the bad ending of the lizards.. introducing you to the upcoming character, who i assume another crossover from another game... this character has the power to hypnotize you and make you do what it want.. it will also show you its power and almost make Korg kill you
i'm not sure, but i think they mentioned the number of days you should me right now to have the nightmare popsup while sleeping in your house.. but i tempt to forget numbers ^o^
you see, i play this game once a month, so i rarely remember the exact triggers that i did.. i hope someone can help you better in that.. but, nothing happened afterwards, you would want to wait the next update if the nightmare would happened once again..
[probably spoiler alert]
i believe the one in the nightmare is Slye (i guess thats his name) the right hand lizard of Nauxus in Tavern of spear, he is interested in power, and in that game he was able to control MC. and i hope the mysterious bracelet found in the underground caves, would help you to untie yourself from his mind control
[i might be wrong] ^_^