After Riku retrieves the Stage Gadget from the Beagle Boys, he returns backstage to stop the trap Pete has set for Mickey, Donald, and Goofy. As Riku runs towards the machinery, the Holey Moley pops out from one of its holes and knocks Riku off his feet before ducking back into the hole. While Riku scans the room for it, it briefly reappears on the wall behind him and taps him on the back before disappearing again. Momentarily confused, Riku glances over his shoulder and spots the Nightmare on the far wall. He then engages it in battle, muttering how "they just never want to make this easy". After defeating the Holey Moley, Riku returns the gadget to its place and uses it to disable Pete's trap.
The Holey Moley resembles a mole that is styled after a knight in armor, it has an orange-to-purple helmet with square-cut out slits for its eyes, its nose peeks out from the middle of its face and is colored red, yellow, green and blue at the tip. On the top of its helmet there are two feathers; one colored pink and yellow and the other blue and yellow from the top, underneath they are swapped in which the pink and yellow feather is now pink and yellow with yellow spots while the other is pink and yellow with blue and yellow with yellow spots. Its helmet is held together by two gold hinges on each side. Its clothing is mostly black, with sleeves similar to those of 19th Century French soldiers, with red slits and red hems. Its hands are a dark purple on top and a light purple in the palm and have two S-shaped figures on the top, one that is orange and yellow and another that is purple and blue. It also has three sharp claws that are mostly turquoise but are yellow at the tips. Its chestplate is black except in the center and two S-shaped figures, the chestplate is a yellow-brown color in the middle and the two figures are rainbow-colored similar to that of the nose. The Nightmare Dream Eater emblem is located on the middle of its chestplate.
The Dream Eater's names are derived from "Hole Mole" (穴土竜 Ana Mogura ), based on the mole's propensity for burrowing. The English name is also a double entendre on "holy moley", an expression of surprise.
The Holey Moley tends to use "warp holes" to attack at first, mainly using its claws to deal damage. As always, Riku can use Flowmotion attacks to deal quick damage, but beware, as this still will leave him open to attacks. After the hands have taken enough of a beating, the Moley itself will appear to finish Riku off. The Holey Moley favors shooting gift-like objects at him from afar, but they can easily be avoided. When up close, the Moley will either attack with its claws or retreat into its dimensional hole and reappear close-by, though its retreating will deal some damage. Once its HP starts dwindling to the "red zone", the Moley will become more and more aggressive As long as Riku dodges Holey Moley's attacks, the Nightmare will fall with relative ease.