The nightmare became a reality.
This sentence sounds to me like the nightmare has animacy. It is realising itself, where 'itself' is the implied object of する. It all sounds rather sinister.
Presumably, this is actually a perfectly normal sentence, but if I were to make my own translation I would have said:
Is this correct? Does it have a different feel when compared to the original sentence? What difference does the 化 make in 現実化?