This study investigated whether narcissistic grandiosity and vulnerability are related to the incidence of dreaming about persecutory themes, dream work, and dream–reality confusion and whether these relationships are modulated by superego functions, affective traits, splitting defense, somatoform distress, and hypochondriacal disturbance. The Pathological Narcissism Inventory, Dream Intensity Scale (Diffusion), Dream Motif Scale (Persecution), Marlowe–Crowne Social Desirability Scale, International Personality Item Pool (Agreeableness, Conscientiousness, and Healthy Anxiety), Somatoform Dissociation Questionnaire, Affective Neurosciences Personality Scales, and Splitting Scale were administered to 160 young adults. The findings indicate that dream experiences measured by the two dream scales vary in direct proportion to narcissistic grandiosity and vulnerability, along with hypochondriacal and affective characteristics being other positive indicators and superego functions being the negative indicators. Nevertheless, splitting defense is a salient correlate of pathological narcissism such that it mediates the relationship between narcissistic grandiosity and the occurrence of persecutory themes in dreams. Accordingly, persecutory dreams might spring from the affective experiences of idealizing and devaluing others, which characterize the mechanisms of defense observed in narcissistic individuals.