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Nightmare Fuel: Children of the Red King
Most of the evil endowed talents are pretty scary.
The reveal that Titania Tilpin is a witch is pretty horrifying, as well as the fact that she bears Lyell a grudge for rejecting her for Amy Jones and will do anything to make sure he doesn't wake up from his trance. It's chilling to see how cold-hearted and determined she is to have her revenge.
Dagbert Endless could be extremely creepy from the beginning, but the part where he drowns Tancred really takes the cake. The description of the scene combined with the fact that poor Emma could do nothing but hide as a bird and watch or risk sharing his fate makes it a bit of a Tear Jerker as well. It's worth noting that despite his later Heel-Face Turn, and the fact that the drowning wasn't permanent thanks to the Flames, Dagbert was still probably the only villain who succeeded at killing one of the main heroes in cold blood, despite many others trying.