Luna has been getting lots of complaints about constant nightmares from ponies everywhere, so she tries to make a spell to put an end to it one and for all. The only problem is, instead of solving the problem, she brings her own worst nightmare to life: Nightmare moon. Being the swift and cunning pony she is, Nightmare Moon quickly possesses Luna's body and turns everypony against their beloved moon princess. Celestia has no choice but to send Nightmare Moon and Luna to the moon where Luna waits a thousand years for her nightmare to be defeated.

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Note: The 'Alternate Universe' tag is simply because it's so different from how things happened in the show, and parts of the story take place on the moon...