Dream Nail

Function
Hold down DREAM NAIL to charge and swing the Dream Nail. This can perform several functions: The Dream Wielder charm, granted by the Seer after collecting 500 Essence, greatly reduces the charge time of the Dream Nail and doubles the SOUL gained from hitting living enemies (from 33% to 66%).
 * Extract Essence from Ghosts
 * Activate Whispering Roots
 * Collect SOUL from living Enemies (33% meter)
 * Challenge Dream Warriors
 * Challenge Dream Bosses
 * Enter the minds of Dreamers
 * Access the White Palace (Awakened) and the Shrine of Believers.
 * Read the minds of NPCs, Enemies, some statues and corpses
 * Use to set or travel to a Dream Gate (Requires 900 Essence)

How to Acquire
The Dream Nail is acquired in the Resting Grounds by inspecting the Dreamer Statues. Doing so will send the player into a dream where they will receive the Dream Nail from a Moth.

Essence
Essence is the energy gained from multiple sources after obtaining the Dream Nail. After obtaining certain amounts of Essence, the player can return to the Seer for rewards. A total of 2400 is needed for all in-game rewards and Achievements. Warping using the Dreamgate uses 1 Essence each time.

Essence Sources

 * Using Dream Nail on a Ghost (26 total)
 * Collecting Essence spawned by a Whispering Root (482 total)
 * Defeating a Dream Warrior (1100 total)
 * Defeating a Dream Boss (1000 total)
 * Defeating White Defender (300) and Grey Prince Zote (300)
 * Regular enemies have a chance to drop Essence:
 * Normal chance: 0.5%
 * Dream Wielder equipped: 1%
 * If Essence was spent: 2%
 * If Essence was spent and Dream Wielder equipped: 4%

Essence rewards from the Seer

 * 100 Essence - Hallownest Seal
 * 200 Essence - Spirit's Glade opens
 * 300 Essence - Pale Ore
 * 500 Essence - Dream Wielder Charm
 * 700 Essence - Vessel Fragment
 * 900 Essence - Dream Gate
 * 1200 Essence - Arcane Egg
 * 1500 Essence - Mask Shard
 * 1800 Essence - Awaken the Dream Nail, allowing entrance to the White Palace
 * 2400 Essence - Ascension Achievement

Trivia
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 * It is possible to miss one Essence if Cloth does not help the player fight the Traitor Lord.
 * It is not necessary to use the Dream Nail on passive Ghosts to fully awaken the Dream Nail
 * It is unknown whether or not Ghosts are the bug's spirit, a lingering spectre, an imprinted memory, or some other form.
 * Awakening the Dream Nail also grants the player the ability to read the dreams of the giant corpses in The Abyss and Kingdom's Edge.