Delighted when the child has a bad dream (7)
I believe the answer is:
charmed
'delighted' is the definition.
(charm can mean to please or delight)
'the child has a bad dream' is the wordplay.
'the child' becomes 'ch' (abbreviation for child).
'has' says to put letters next to each other.
'a bad' is an anagram indicator.
'dream' with letters rearranged gives 'armed'.
'ch'+'armed'='CHARMED'
'when' is the link.
(Other definitions for charmed that I've seen before include "Entranced" , "Unusually lucky" , "Enchanted" , "blessed by fortune" .)