You're right, this is happening at an age and stage where kids start to, as you say, "get reality" and realize there are frightening things in the real world. He may be transferring that some to the stuffed animals. I wouldn't push him to take any of them back on his bed; leave them wherever he put them for now. If he suddenly rejects the elephant too and says it also MMMMd him, find a calm time to ask him what happened, did the elephant say or do something or just look funny, etc. And if he wants to put the elephant away, let him do it wherever he likes. This may indeed be related to the nightmare stage -- he can't control his nightmares happening because he must sleep sometime, but he feels he CAN control his relationship to the stuffed animals.
If he starts doing it with everything -- animals, other toys, items of clothing, whatever, -- yeah, then I'd get a little more concerned, but for now, don't call too much attention to it; let him have this control. And as someone else posted, does he have an older sibling who might have been introducing the idea of the animals being scary?
As for the drapes, if he's terrified of them, why not replace them?