Here's 2 examples of using a nightmare (the same nightmare) to show-not-tell a character's fear/obsession as the primary motivation for their in-story actions.

Dreamscape (1984)

Terminator 2 (1991)

It's obvious from the context of the stories that the nuclear holocaust dreams are not real (the story would end but the films aren't even halfway through their running time). The goal is not to fool the viewer and then reverse it. They are intended to show the character's idea of the worst case scenario: what they fear will happen if they fail.

It's debatable whether these dream-sequences are successful narrative devices. They are handled clumsily with heavy portent, the special effects are unconvincing, and the "victims" are not even characters within the story. In Dreamscape it is the US President's wife who is never mentioned in the script. In Terminator 2 the victims are other people's children and the MC dressed up in a waitress uniform she wore for all of 5 minutes in the first movie when she didn't have any children of her own. Perhaps the little boy is the brat that put ice cream in her pocket, but it certainly isn't her son John Connor who is a major character in the film.

They serve more as a spectacle of death and disaster in what are essentially long plots about being chased by a monster. In both films the monster is a real and immediate threat, while dying in a nuclear strike is never a possibility. There is an enormous mis-match of scale between the characters' motivating nightmare and the actual stakes within the story.

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