It still needs some tweaking...
...but your heart is in the right place. ^_^
The animations are good, the controls are tight and responsive and the overall theme is clever. It's a refreshing twist on the original Popcap title.
However, there are a couple of wrinkles that need to be ironed out, mainly involving the later levels.
One problem is the assumption that players will continuously click the books available to them to quickly build up their supply of 'Fantasy'. Not only is this extra wear and tear on the player's mouse, but it can all too quickly become a 'guns and butter' situation - should the player add another book for more 'Fantasy' later on or another toy that will keep the approaching 'Nightmares' at bay?
This gets especially aggravating at Level 12 on up - I was able to pass level 12 by using 'cheap' toys as part of my strategy but on Level 13, I am *still* being overwhelmed by nightmares (mainly due to the game's overuse of skeletons) and I have tried a *LOT* of different toy combinations (including the picture book which *does not* produce 'Fantasy' while it's attacking, making it useless).
Again, your heart is in the right place, Xplored, but I cannot give this game a high score in its current state. If you were to do some further testing and add a [Restart Level] button to the game's pause screen, you could turn this flawed diamond into an enjoyable challenge.
Thank you for posting this, in any event. ^_^