Fear
Fear characterizes nightmares and encounters with the unknown. One should remember that what we encounter in dreams is generally a reflection of our attitude towards the content; what we banish within ourselves returns as monsters, not because it is inherently evil, but because the ego is somewhat like Frankenstein. Anyone familiar with Shelley’s novel knows that Frankenstein's monster was not of an evil nature, but it is the banishment to the wilderness (the unconscious) that triggers the tragedy, making Frankenstein's happiness impossible.
Ego’s Reaction
One should be careful with basing interpretations of a dream image solely on the dream ego’s reactions. For example, we often become frightened in dreams when something repulsive to the ego happens, but upon a more objective view, what seems dreadful may actually be or lead to something good.
One could add that the dream ego’s reactions and behaviors often reflect the waking ego’s habitual and possibly unconscious ones, but expressed symbolically. Thus, the dream ego’s reactions are not always the most appropriate.
Wisdom
Fear is not necessarily something bad in itself. “The fear of the Lord is the beginning of wisdom,” as it is written in the Bible (Proverbs 9:10). Those who are incapable of fearing what should be feared, probably due to inflation, are unlikely to be wise or adaptable.
Facing Danger
Overcoming fear (such as facing with an open mind that which chases one in a dream) tends to be more rewarding than avoiding what one are afraid of, while also understanding that some things should be feared. It is this narrow path forward that denotes wisdom.
The Extraordinary
An encounter with the sacred or with something greater than oneself is, to a higher or lesser degree, numinous. For example, for unclear reasons, feeling that something extraordinary is approaching can be linked to the ego’s initial encounter with the Self.