The entire series, when one comes to realize that, at the root of it all, it's essentially the story of a bunch of nightmare demons fighting over the 'souls' of sleeping kids.
Wizeman and Reala's treatment of NiGHTS is definitely abuse (though Reala is treated cruelly also), which makes you wonder how bad things got when NiGHTS was a resident of Nightmare...especially if he was always "not scary enough" and/or warmhearted.