Nightmare is a monster added in SLASH'EM. She is the Lawful Quest nemesis, and will leave the Key of Law when killed and Nighthorn if killed in a way that would leave a corpse - Nightmare will never leave a corpse, instead simply producing Nighthorn and the message "All that remains is her horn...". Like all alignment quest nemesises, Nightmare is covetous and will teleport to your position once awakened. Nighthorn is not strictly a unicorn, and thus will not accept gems nor use her horn to heal herself. As Nighthorn grants reflection, Nightmare herself has reflection and all beams will reflect off of her horn.
Nightmare is also found in the dNethack Chaos Quest, with slight changes. She is now a black (chaotic) unicorn, and will be peaceful to chaotics. If they want the slightly modified horn, they'll have to take the -5 penalty for killing a coaligned unicorn. See the Nighthorn article for more.