Too upset about a nightmare play (7)
I believe the answer is:
othello
'play' is the definition.
(play by William Shakespeare)
'too upset about a nightmare' is the wordplay.
'upset' indicates anagramming the letters.
'about' indicates putting letters inside.
'a nightmare' becomes 'hell'.
'too' with letters rearranged gives 'oto'.
'oto' going around 'hell' is 'OTHELLO'.
(Other definitions for othello that I've seen before include "Will's hero" , "Old Black Ram!" , "Jealous character" , "Shakespearean play" , "Literary character" .)