This phenomenon is also called sleep paralysis and is fairly common. This was my first thought upon reading the post. Wicked Replicant is correct; this type of dream often involves hallucination.
My husband experienced the phenomenon several times while he was in college, and I myself, had an episode several months ago. It isn't a pleasant experience, and not one I would want to repeat!
It is theorized that sleep paralysis is a naturally occuring phenomenon and not paranormal in nature. Frankly, I'm not so sure I buy that explanation 100%. Years after my husband's experience, an acquaintance of mine told a story very similar to his, -- oddly enough, they lived in the same apartment complex.
Sleep paralysis typically seems to happen to people in their 20's. I've known several people who have reported the phenomenon to varying degrees. For some, it is just a feeling of being temporarily paralyzed. For others, it comes complete with grisly hallucinations. Mine was of the latter sort, and like I said, it isn't an experience I would want to repeat.