All the townsfolk are suffering the same nightmares and Erandur knows how to get rid of them. This quest is given after visiting Dawnstar and speaking to Erandur, who is in the Windpeak Inn. Erandur, a priest of Mara, wants the Dragonborn's help to destroy the Skull of Corruption, which will release Vaermina's hold on people's dreams. The people of Dawnstar are not sleeping well, experiencing terrible nightmares every night.
They seem to be relying on a priest of Mara named Erandur for assistance. I've overheard two citizens of Dawnstar complaining about horrible nightmares.
