my oldest boy, who I have had since he was 11 weeks old, has had bad dreams on and off his whole life. He used to just whimper occasionally, and I would go sit next to him, pet his head and tell him he was OK. Sometimes he wouldn't even wake up, just settle down and go back to dreaming.
When we started having serious issues with my other male, who passed away, last year, his dreams started to get more "unhappy" with growling, snarling, and even the occasional screaming. A few times he did it in the middle of the night and scared me to death, I thought he was dieing, but when I went over to him to see what was going on he just groaned and looked at me like, "why did you wake me up, mom?"
I have to imagine dogs use dreaming very much like we do. If they are going through stress in their lives, whats not to say they couldn't have nightmares?