But why would a dark undead creature have nightmares? I don't think we need to design this specific creature to solve the psychic gap. It doesn't feel like a nightmare should counter a psychic immunity creature.
Oh, I agree to this so much!
Why do we try to fill a gap for a specific Mage? Isn't it obvious now when we choose the nightmare that it should have some psychic effect? I think we fool ourselves if don't do this thematically. We had the option to do something else, but nightmare it is.
That's par for the course....The Warlock has a thousand creatures and the FM 3 with none being really useful. With that said, I am done here, have fun with this thematic but not very useable (i.e. playable for FM) creature.
Yeah, well, that's the problem when you start with the "fluff" although you want to have a certain kind of "crunch", IOW: If the goal of this creature is to fill a currently existing "design hole" by having a certain kind of game mechanics or stats, you should have started by defining it's purpose/role.
At least that's what the D&D designers did when they started working on follow-ups to their monster manuals.
If you want to keep the Nightmare fluff despite that, how about the following:
Give it an attack that will transport itself and the attacked creature into a "nightmare realm" and a second (Force?) attack that it can only use while in that "nightmare realm" and only against the creature it affected with its forst attack.
I'd imagine that this first attack should work similar to [mwcard=MW1I01]Banish[/mwcard].
To return, the affected creature would either have to kill the Nightmare creature or ... something.
What I'm not sure about is the power level of such an attack. would this really be appropriate for a level 4 creature?