Different people have different reactions. Your "horrid dream" is the first I have heard of negative dreams, although vivid dreams are part of it, especially at first.
When I first started, I loved taking Iodine at night because I would sleep better. I actually liked the dreams.
Now I have to be careful taking large doses at night because I will be up all night. I can do with a small dose at night.
That is why I think some get discouraged. What they think should work doesn't work for them, but with a little experimentation and adaptation, Iodine is marvelous!