The haunting past of Shippo's father killed by the Thunder Brothers [ep9-10] and the Lizard Demon [ep55] whom he couldn't defeat bred the fear that all three of them would come terrorize Shippo again.

In the final part of the nightmare, Shippo is running away from his enemies. The saving grace came when Shippo remembered Inuyasha telling him to hold himself together.

Shippo, looks like you tried your best there!

— ep55 [Stone Flowers and Shippo's First Love]