Hitler is in this fic, and it pulls no punches when it comes to him. He is as ruthless, sadistic, and charismatic as he was in real life, maybe even more so. Almost all the other villains defer to him. Even his Villain Song, which would normally be the definition of Adolf Hitlarious, is serious and disturbing.
Doctor XXX is the Nazis' chief scientist and torturer, and he's at least as scary as he is in his original cartoon. He is disturbingly ecstatic about experimenting on anything and everything. It's explained that in his backstory, he killed his entire family tree and reanimated their skeletons to be his minions. It's emphasized that he has absolutely no ethics and no limitations in his quests For Science!. His inventions are on a scale of devastation unheard of by anyone else, especially in World War II. Most of the other Nazi leaders, some of the most powerful, dangerous and evil beings in the world, are disgusted and terrified of him. One of their first actions in the fic is sending him right into the fray of a battle to get him killed. All the extremely powerful villains working together, and one of their first actions in the entire fic is sending one of their own partners to get killed. And it doesn't work. Think what that says about Doctor XXX.
All of the inhabitants of Underland. The silly and nonsensical, sometimes creepy, but usually harmless characters from the 1951 cartoon are described as demonic Eldritch Abominations who are literally from Hell, whihc is what Wonderland really is. They're also known as the Friends on the Other Side, and are the Greater-Scope Villains for the entire Disney universe. And, if you're born to the wrong parents you have the chance of becoming a Devil and joining them, which could be the fate of Peter Pan. All that would be scary enough, but they're pretty bad individually too.
The Red Queen is seemingly the ruler of Hell. We know very little about her, but she is described as "the queen of lust and heartache". She tries to take Hook's mind as the price of his love, and although at first he resists, the later entries of his log show him going insane. The fact that she could possibly have such an affect on him without him realizing is pure Paranoia Fuel.
In the prologue, during Maleficent's encounter with Odette, Maleficent casually has Diablo take Odette's eyes and teeth, apparently just for the heck of it. Before this, Maleficent cast a spell that does something to Odette's mind, causing her to cheerfully not mind what Diablo's doing. Depending on who you are, this could make it better, or it could make it worse.
Neverland getting destroyed by the Nazis. When they first attack, Peter, Hook, and the others are able to put up a fight, and even have a possible chance of winning... then the bombs drop. That's it. Neverland is completely devastated in seconds. The Indians are all killed, the Fairy Tree is destroyed, and the surviving mermaids have to flee back to Atlantica. It's very much a combination of Nightmare Fuel and Tear Jerker.
Then there's the Captain's Log of Captain Hook:
Starting from a noble pirate on his Honeymoon, diving down deep into depression, to the point of starting a war to alleviate boredom, and then after a brief Hope Spot, Hook goes completely mad and starts trying to kill his wife. And then there's the fact that Tinkerbell is Peter Pan's mother, and in order to survive childbirth they had to use the magic flower from Tangled.
This is probably the most nightmarish entry of the log, especially as it's our first glimpse of Hell:
I went to hell today. I met the Hare who arrogantly challenged the Tortoise to a race, condemned forever to be late. I met the twin demons of wrath and they sang me a song of death, despair, and cannibalism. I met the god of sloth and his insane henchmen. One of them made me a new hat out of the skin of children. And finally, I met the queen of lust and heartache. She stared at me with her angry eyes, and demanded my mind as the price for my love for Tinkerbell. And I looked at her and I said "Why don't you try and take it?"
Tink tock, Tink tock, look out fairy, look out croc, Tink tock, Tink tock, look out fairy, look out croc, Tink tock, Tink tock, look out fairy, look out croc, TINK TOCK, TINK TOCK, LOOK OUT FAIRY, LOOK OUT CROC!
Shego's fate. At the age of five years old, she's put into a spandex costume to fight in a war. And then she has to watch the Headless Horseman, who is already pretty frightening, kill her older sister. But then when she tries to burn the Horseman, and he puts on her sister's head to mock her. Watching her sister's head burn up puts her into a Heroic BSoD.
Doctor Facilier's Villain Song, "Put a Feather in Your Hat". Sure, the musical skeletons and dancing tombstones described are more Creepy Awesome than pure Nightmare Fuel, but other parts are more the latter.