You can only do this once you've been in Sartis dream. Anyway you will need to beat all the minigames in Phoebes dream once, after you do she awards with a draw card. In Sartis dream when you fist go in it, you have to fight those easy enemies and kill them easily.
Then Sarti comes and congratulates you, then you talk bla bla bla bla, then You fight Sarti who is easy. Once you beat him he awards you with a draw card. Now you have three draw cards. Go back into Sartis dream and ask him if you fight hard enemies. They will be all bosses you have fought in the past except for the one in Chiffons dream. Ask if you can fight Cacey, but before you do this make your three draw cards are filled with each element: Scorch, Shock, and Freeze.
Don't worry when the balls of light that are surronding him are normal, just use ragna and arablast, but after that use the draw card element you need and arablast. Then just kill him like you did before when you destroy the three balls of light.
To beat Nightmare get get the arbalest the crossbow thing out and the snake fang out to.
OK first keep shooting nightmare until his sheild brakes then charge the arbalest and shoot him. Then his ribs will open use the snake fang and grab the black thing. Let nightmare suck you in. You should be inside nightmare now.
Switch to the hammer of your choice but keep the snake fang. Grab the black thing and hit it with the hammer.
Repeat till crystals fall out. Smash them with the hammer. Now repeat untill all crystals are gone. You will now be outside pf nightmare do the same thing as the first time you where outside of him.let him suck you back in.
This time there will be two of those enimys in him destroy one at a time wile doging them both. Repeat you will be back out side again. Do the same thing again. Let him suck you in.
Destroy the three monsters inside of him. You will be back outside again. This time make sure your baku or tumble is full no empty stomaches at this point so feed him. Get on tumble and find a lanch pad jump on it and make tumble fly. Charge at nightmare and he will take damage. Repeat this and he will die.
Remember to try to keep baku full and heal when needed. dodge the attacks and you will do fine.