Early art concept (by me)
Massive creatures that were originally humans, somehow deformed and changed during the Final Light. Nightmares are deadly to any living creature that encounters one; They are voracious and violent, with an increased sense of smell and hearing compared to normal humans. Fortunately, their eyesight remains the same as humans, and they are unable to see well at night. They hunt exclusively during the day, giving survivors the chance to live their lives at nighttime.
A nightmare's senses are good enough to find large groups of survivors, especially those that stay in one place for too long or have set up roots of proper civilization. It seems a small echo of a human's intelligence remains, as they understand that lanterns and small buildings mean something is living in the area. Ever since the Final Light, any colony that's tried to reform too quickly, or has grown too big, has been found and destroyed.
Nightmares don't have much art (yet), but I always pictured them similar to these. Clearly humanoid but fucked up and malformed. Appearances would change from nightmare to nightmare though, without any real specifics beyond "man yeah that human really is fucked up huh"