The Angelic Emperors themselves were phantasmal demons living in the Dream Realm, and all of them could enter dreams directly. Just as birds could fly and fish could swim.
Even ordinary phantasmal demons generally possessed this ability, provided they could reach the Material Realm by their own means.
As long as they could enter dreams, they could easily destroy mortals from within them.
Curses, illusions, implanted suggestions, altered memories, or the direct destruction of the soul.
Mortals were ultimately beings who lived in the Material Realm. Only when dreaming would the remnants of their thoughts project into the Dream Realm.
Apart from professions like the Dream Wandering Monk that possessed the "Dream Walker" trait, mortals had no ability to resist in the Dream Realm. They did not even possess a conscious sense of self.
That was the essence of certain "revelations," "prophetic dreams," and "demonic possessions."
—Of course, even Dream Wandering Monks with clear consciousness were actually incapable of resisting.
If a phantasmal demon attacked them in the Dream Realm, they could only die a little more lucidly. In fact, their conscious awareness made them easier to attack... much like transcendents within a Promotion Ritual.
When transcendents entered dreams with clear minds, their souls entered the Dream Realm directly.
Before the "host" system became widespread, the first thing those ascending in the Dream Realm had to do was survive the phantasmal demons that preyed on souls—but outside the areas covered by Promotion Rituals, Dream Wandering Monks had no "host" to protect them.
Living beings who lucid-dreamed and unconsciously wandered into the Dream Realm could easily come into contact with its phantasmal demons.
It could be a good thing, bringing them some kind of fortuitous encounter. They might meet a knight, sage, or angel and learn swordsmanship, spells, or divine arts