Darkrai's (and Dyo's) Bad Dreams Aura
(( A Darkrai's most common blight is its Bad Dreams Ability. If you fall asleep around a Darkrai, you'll experience horrible nightmares. This is often cited as the reason many of the species hide themselves away: to "protect" others from harm.
It doesn't work exactly that way in my own personal lore.
All Darkrai possess a natural aura. A lot of pokemon have one, but it's most notable in Ghost and Dark Types. This aura comes off as a sensation, a feeling, an emanation, from a being. A Darkrai's aura can say a lot about them. It can reflect whether they are peaceful, aggressive, welcoming, etc. or what sort of emotion they are feeling at the time. It's an aura that is unique to them as individuals.
A Darkrai's aura is especially potent. They can sense one another's aura much more intuitively, but it is felt by all species, including humans. An unfortunate quality of their aura, is that no matter how docile one is at the time, their aura still emanates their power. It's not necessarily a negative sensation, but it might come across that way to those who aren't good at reading it. It's merely a powerful feeling, that something very strong is present.
This aura has a varying radius depending how strong the Darkrai is physically and mentally. Generally it can only be felt when the Pokemon is present within a space with someone. However, Darkrai are extremely territorial and are guardians by nature. This means they routinely will venture around their territories to make sure nothing is amiss. This results in remnants of their aura being present wherever they go, whether intentional or not.
When confronted with this aura, one might feel a distinct sense of unease. Again, while not always negative, it is very powerful. Pokemon and humans might not comprehend how to read this, and instead just think, "Oh, there's a big scary creature in these woods". It is this feeling that often results in one having so much discomfort they might not feel safe sleeping soundly at night. It might even bring on... bad dreams.
Lycanroc (Lyra) belongs to @lenoratheyinglet
Darkrai feed off nightmares only when activating moves like Dark Void or Dream Eater. Someone just having a nightmare in their vicinity doesn't do anything for them. Their aura causing someone to have a distressful sleep is not an ability. It's just a side effect of paranoia that has been misinterpreted. TL;DR: humans felt a Darkrai's aura, got uncomfy, had nightmares because of it, then came to the incorrect conclusion the Darkrai did it via an ability it had.
When Darkrai protect (or once were protecting) their territory, every Pokemon who lives there knows they exist. They LIKE their Darkrai guardian! They're there to keep them safe! The effects of the aura don't do anything, in such cases. Sure, the Darkrai might feast on their dreams now and again, but it's a tiny sacrifice to make in exchange.
It's only when someone is clueless to, or uncertain about a Darkrai's intentions that this feeling of paranoia and unease lead to nightmares. They're blaming a guy for their stink aura, essentially!
So when it comes to Dyo, there's a few things worthy of relevance. For one, although he's still very powerful, he's not quite as in-tune with his strength as he once was. He's no longer fending off enemies and being responsible for thousands of innocent creatures like he was in his old forest. While he half-admittedly treats Ganymede Town like his new territory, he's not as aggressive about it as he might have been back in his forest. There's a lot of elements about a human town that are out of his control. So he's kind of a lazy guardian, in that sense. Enjoying that retirement.
In combination with this, Dyo has fought very hard to make himself as least-threatening as possible towards humans. While it's rare for him to admit this, he rather humans not fear him 24/7. As a result of these factors, he has trained himself to control and subdue his aura.
So basically, he cut down his big stinky boy smell.
Many humans and Pokemon can still feel unsettled by the aura he emanates, but they aren't freaked out enough by him to get nightmares just by being in his presence. So, you're not going to get restless nights by taking a trip to Ganymede. Well, not unless Dyo smells fresh meat and decides to dine as a little treat.
This also means Milly does not get bad dreams by taking a snooze around him. She doesn't need any tricks--not that Cresselia Feathers would do her any good anyway--because 1. she doesn't fear Dyo as an entity and 2. his aura doesn't frighten her.
There might be times when Dyo becomes emotional, be that with anger, sadness, anxiety, or something else that will cause his aura to expand and become more evident/potent. Even getting excited or overly joyful can cause him to lose control of it a little bit. If this happens, it still won't matter much at all because the humans and Pokemon he interacts with still aren't super scared of him. If anything, it just forces them to become Empaths with the annoying drunk man for a hot second.
So ultimate TL;DR: Bad Dreams ability isn't real with my Darkrai. It's a hoax. You won't get nightmares just by sleeping in a Darkrai's presence so long as you internalize that it isn't going to hurt you. Just get good.
Sooo yeah! I only recently had a brain blast with this concept, having only dabbled in it a time or two in the past, so it might not be consistent across all my media. I wanted a place to write it all down both for others and myself.
Hope it was fun to read and that Dyo's dopey expression amuses you! ))