Nightmares are the Hell Terrain counterparts to Horses. Any mounted unit that is built while a civilization has access to Nightmares receives +1 Unholy combat strength. Note that this bonus is not applied to units already built. This resource also applies the 1 hammer bonus to connected cities, the same as horses and stacks on the existing bonus horses provide.
Nightmares are not considered sufficient for purposes of meeting the Horse resource prerequisite to build the Ride of the Nine Kings world wonder.