The good news about nightmares is that they are a sign that something powerful has begun to stir within you. A monster can appear in a dream as a representation of your power and how you may find this power frightening. Dream images can take on a Shadow form because we are unwilling to face something difficult or painful. For example, a person who was labeled a black sheep or 'a difficult child' can have two personas active: they can be a successful achiever by day but have unresolved tapes from childhood that undermine their sense of self acceptance or self worth. They may dream of a stalker trying to 'break into their house' (integration with Self) as a representation of this 'vagabond' identity and the need to understand, integrate it and 'let it in.'
A Dracula character can be a way of exploring how what your are doing might 'vampire' or deplete another area of your life because you are overly focusing on one thing. A Frankenstein character can represent moving through life without heart or sensation. The devil can personify being depressed or giving up on the goodness of life and feeling guilty about doing so or being unwilling to face depression. The monster is portraying you in some way.
Explore first the symbolism represented by the monster and observe how it might symbolize an aspect of you. The energy only appears as a monster because it has lived in the shadows for so long. In all cases, monster dreams should be viewed as a call to confront what you have hidden away. There is nothing negative taking place - it is an initiation that can lead to authentic power and increased self knowledge.
The monster can also represent what feels beyond your ability to manage such as: your temper or anger. The monster can be a way of releasing feelings that are considered 'unsavory' by day. A woman approaching menopause may feel her body doing things that seem beyond her power to control and she may dream of a monster kissing her as she attempts to integrate and understand the changes her body holds over her. At menopause stages particularly - the monster will have more of an association with being more male than female. For a man who is not owning up to outbursts, he may dream of a monster or unsavory character stalking him. In all cases the 'bad and frightening thing' is merely representing aspects of you that are not integrated. This monster can also portray a type of power that once understood, can lead to greater empowerment and fulfillment. See Shadow and Archetypes and Universal Characters.