Two young blood maidens are escorted into the Rescue Center, Snow White and Sleeping Beauty. They explain to Jack, Alice, and Red Riding Hood that the Nightmare in the Graveyard kidnapped their older sister, Thumbelina, as they were exploring. After the group rescues Thumbelina and defeats Princess Seige, they are confronted by the G. Nightmare, which the group defeats to end the chapter.
The G. Nightmare appears in Chapter 10 of the second game. Unlike its first iteration, the nightmare itself does not have much story relevance, simply serving as an obstacle for the party to get through on their way to the Tower Base.
In this timeline, the G Nightmare is married to C.S. Nightmare and is Jack's biological father, as well as the adoptive father of Rapunzel.
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The nightmare itself is an amalgamation of the fairy tales from Thumbelina, Snow White, and Sleeping Beauty. It has a beetle-like body shape (Thumbelina), what appears to be royal garbs and a crown (Snow White), and a spindle point underneath its hammer (Sleeping Beauty).