Missable achievement, comes late in the DLC, after you repair all the memories of Iris von Everec, so do not worry that the first enemies count towards this achievement, they do not.
After you repair the last memory, where you put the bowls in place, you will be transfered to a fireplace-lit hallway, where a specific enemy will attack you. This is the nightmare the achievement is talking about. There are 6 enemies in total and 5 of them are in dormant state. To wake them up, simply attack them with your sword.
As The Mankey pointed out: I had issues trying to strike the dormant guys with a sword. I would miss them several times and be almost dead by the time I got all them hit. Found it was way easier to run way back right away and throw bombs at them. If placed right it should only take 2 to hit them all. Also, keeps you from being right next to them when they wake up.
When all of them are awoken, strike them like a group with your heavy attack, then roll away, prefferably with your shield turned on, as some enemies from the group can do a quick attack, that takes A LOT of health and you want to spare those Swallows to the next part of the fight.
Striking them with your heavy attack has 2 main advantages. You can hit many of them with one swing and they will have approximately the same health when you attack them evenly, so you will have less pain in the second part of the fight. Igni does not work, it only stuns them, I tried.
When you are low on health and there are 4 or more enemies, use food, not Swallow and keep your distance, they do not have any long range attacks at this point of the fight.
They have one lifebar at the top of the screen, but each of them has their own (a couple of 1000s) health. I also used 2 potions, that gave some health back to me when I attacked and took some of their health as they attacked me to make it super-easy.
When you kill 3 of them, their attack pattern will change a bit, so roll heavily and cast a protective shield now and then with some attacking of course. Their attack will wear them down after some time and they will rest on the floor, this is when you must do heavy damage.