E.D.
Bad dreams can start at a very early age (even younger than your child). One of my sons is known to have night terrors from time to time. He will start crying and at times act like he is awake, when he really is not. He will not answer me when I ask a question and after a few minutes will stop.
There really isn't much you can do but sit with your child and try to calm them down. I was told not to try and wake my son up while he is having this happen...instead I am to sit there and rub his back or gentle talk to him until he stops.