Thor! infrequently has what I would define as nightmares. I gently wake him. They differ from what I'd define as regular dreaming in the patterns I observe: Labored "panting" through the nose. Very short muscle twitches. Sometimes whimpering.

Regular dreaming seems to have longer deeper breaths, no whimpering, longer muscle movements, slightly less rapid eye movement.

Interestingly enough, when he was a puppy and had them more often, I'd wake him by nuzzling with him. (He was force-weened very early when mom dried-up). Now, years later, when I'm having one of my infrequent nightmares, I'll awaken very quickly to him licking my face and nuzzling me with his cold and wet nose. So clearly he also had the capacity to differ between "good and bad" dreams, and to learn similar signs in me, and to reason-out that he should perform a similar service.

Fascinating, really.

I've had one or two night-terrors since I've had Thor!. He seems to sense the elevated flight-or-fight response in that after awakening me, he'll go to guard (a trained defensive posture) and remain at guard the entire night - I've videoed it, and have also woken up to find him still standing at the foot of the bed, leaning forward aggressively, and scenting the air.

So that said, with a rather small sample-set, I will draw the tentative hypothesis that he doesn't experience night-terrors, and associates my response as being a real-world threat.