The nightmare stone first appeared in the video Super Mario 64 Bloopers: Crystal Funhouse where SuperMarioGlitchy3 set it as a trap underground so when SuperMarioGlitchy4 and the Youtube Rangers found it they all touched it and got trapped in a nightmare controlled by SMG3. They later all escaped with the help of AustinDawgyDawg and GageDawg. The stone returned again in the blooper "Super Mario 64 Bloopers: Bowser and the Nightmare Stone" in which SMG3 sold the stone to Bowser so he can take revenge on Mario along with SMG4 and his friends again with a nightmare, but they escaped again and some nameless guy broke the stone with a pickaxe. It appeared one last time in the episode "SMG3's Plan to Destroy SMG4 because he felt like it", in which SMG3 used it to bring back a bunch of previously killed bad dudes.
Power and Abilities
The Nightmare Stone has the ability to make anyone who touches it trapped in a nightmare, and if it's someone rubs it and takes control, they can trap anyone in a nightmare they desire with a strike of lightning. Also, it can apparently bring back anyone who is deceased. It also has a switch whether the option is "Terrible", "Kirby Nightmare" and many more.