Melatonin does not directly induce nightmares, per say, just the vivid or lucid dreams you are familiar with. However, if just one of those incredibly vivid melatonin induced dreams goes awry and descends into nightmare territory, you will remember it for a long, long time.
I've had nightmares while taking melatonin with the same frequency as I've had them the rest of my life. They're more vivid, but I've forgotten them just fine.
