Such a good spell

I just realized that this spell isn’t concentration, so you could cast it to let a messenger enter your dreams once you fall asleep.

Since 6 points of exhaustion means death, couldn't you use this to assassinate anyone on the same plane of existence over the course of 6 nights.
Once the target has taken 3 points of exhaustion it would have disadvantage on saving throws against your further spells.
You could argue that the target attempts another long rest after the eight hours is up. In which case, you'd have to cast the spell again, up to 3 times a day.
So an 18th level spellcaster or 3 x 9th level casters could do it.

Yes. A horribly slow, debilitating, torturous, no good death fed by nightmares.

An elf could also pull it off, because you regain your spell slots after four hours (trance) so you could just long rest, then interrupt theirs. 

Quote from Nguruvilu >>

An elf could also pull it off, because you regain your spell slots after four hours (trance) so you could just long rest, then interrupt theirs. 

 No long rests are always 8 hours, elf just get up early

Quote from FarwinMageBlood >>

Quote from Nguruvilu >>

An elf could also pull it off, because you regain your spell slots after four hours (trance) so you could just long rest, then interrupt theirs. 

 No long rests are always 8 hours, elf just get up early

Not anymore. This was once true, but has since been changed.

Does the Trance trait allow an elf to finish a long rest in 4 hours? If an elf meditates during a long rest (as described in the Trance trait), the elf finishes the rest after only 4 hours. A meditating elf otherwise follows all the rules for a long rest; only the duration is changed. [This answer has been altered as a result of a tweak to the rules for a long rest, which appears in newer printings of the Player’s Handbook.]

-Sage Advice Compendium, http://media.wizards.com/2017/dnd/downloads/SA-Compendium.pdf, page 2

I think I just figured out the ultimate assassin. A Goblin warlock using this spell could potentially cast it 7 times during one long rest as they regain spell slots with only a short rest.
Using their feature "Fury of the small" allows you to add your level as damage to one spell or attack per short rest. This means that as long as they fail their saves, you could stack a minimum of 12 dmg ((3d6+9) since you can first get this spell as a warlock at 9th level.) 7 times per long rest of the target. If all saves fail, this means that they will take at least 84 psychic dmg upon waking up, as well as gaining a point of exhaustion...

The spell can be used on any known creatures that are in the same plane of existence that you are as long as they do, in fact, sleep.

Just get yourself somewhere safe and start blasting the target with bad dreams, and it will most likely be dead within a few days. An incredibly agonizing and dragged out death...

Yeah on second thought, don't do this, it would be incredibly boring...

But it might make for an interesting, but dangerous, foe to your party

Quote from Mooxim >>

Since 6 points of exhaustion means death, couldn't you use this to assassinate anyone on the same plane of existence over the course of 6 nights.
Once the target has taken 3 points of exhaustion it would have disadvantage on saving throws against your further spells.
You could argue that the target attempts another long rest after the eight hours is up. In which case, you'd have to cast the spell again, up to 3 times a day.
So an 18th level spellcaster or 3 x 9th level casters could do it.

 Assuming they failed all their saves, sure. 

That Target could always get a greater restoration to reverse the exhaustion as well.

Side Note:  When you search spells with "Damage Type: Psychic" set in advanced filters... This spell does not show up on the list.

I think it's because that's like a side effect and not the intention. It's listed as a utility spell.

This is one of my fave spells for my feylock

Quote from G_Wiz >>

Yes. A horribly slow, debilitating, torturous, no good death fed by nightmares.

 Especially if the caster gets that lock of hair to impose disadvantage.

Unless they have a really powerful Cleric in their pocket, the target is really done for.

Dream doesn't seem to cause exhaustion because it doesn't disrupt a long rest. It only takes away the benefits of a long rest. So no regain of spell slots and class abilities.

However, if a person is already exhausted, their exhaustion level doesn't go down but I don't think they should gain another level of exhaustion. Tho rules on exhaustion are strange (only written one is in XGtE)

I find it sort of brilliant that an "Evocation" Wizard can maximize the damage dice of "Dream"...

I imagine the dream-like apparition of the Wizard appearing before the target in their sleep, shouting... "EXPLOSION!"...which then deals illusionary explosion damage that just causes the target to fall out of bed...

I first actually heard of this spell in a dungeons and dragons podcast.

Okay, THIS is a spell I MUST learn! It's too perfect for me!

So an elven warlock with this spell is an assassin now?  I only see a few spells that would provide any protection against this (the techniques mentioned in the thread below).  Am I missing something?  Intellect Fortress is the lowest level one that jumps out.

Yes, I believe that you could slowly assassinate someone over 6 days. However, you can't really shorten that time unless they die of the psychic damage, since the exhaustion is just "one day without rest", not anything special about the spell. And if you're trying to kill someone important, they'll probably have a Cleric (et al) on their side to Greater Restoration the exhaustion away,