Mom gets upset and tells her caregivers that one or all of her siblings or grandkids have been killed, or they've been beat up. I wonder if this is similar to how a faulty memory can cause a PWD to believe people who passed away long ago are still alive. Is this delusion as common? She has it all the time, but she never thinks her parents are still living. I wonder if it's the same type of process in the brain.
If dreams just talk to her, try to get her to know that it was a dream. (difficult for a person with dementia) But validate the fear and then redirect. "Wow mom, that was a scary dream, why don't we go get some tea and talk a bit."
If she indeed has had a sibling or grandchild that has been killed or hurt in any way this is her brain processing what is there. (sort of like the Summer Reruns we have on TV now)
If this is a hallucination talk to her doctor about the hallucinations and there are medications that can help.