Dreams and nightmare play a huge role in the fiction of ETA Hoffmann, where anything can, and frequently does, happen. In many of his stories fantastical and often grotesque events are presented as the truth, only for the reader suddenly to be given a rational explanation in order to escape the nightmare: usually dismissing the event as a dream, nightmare, day dream or hallucination. Here we will explore three of Hoffmann’s works, analysing his use of dreams and nightmares and explaining their effects upon the reader.