Roots: Most obviously, Shakespeare's A Midsummer Nights Dream, complete with quotations. The use of phasers is inevitably reminiscent of Star Trek.
Dialogue Triumphs: 'It's obviously only a man in a suit.'
Continuity: Norebo Worms are vast, trans-dimensional, spaceborne creatures that feed on psychic energy. The Doctor has heard of them, but thought they were just a myth. Norebo Worms generate their own gravity, which is how they attract their prey towards them in space. The entire moon of Verd is a Norebo Worm, which formed the moon around it as a chrysalis [given that Ria grew up on Verd, it must have a very long life-cycle]. It finally hatches into a giant beautiful shimmering creature, which can travel between dimensions.
Jo's brief relationship with Latep (Planet of the Daleks) made her realize that she wants someone to love, foreshadowing her departure with Professor Jones in The Green Death.
Tonio finds a recorder in the TARDIS. [It's the Second Doctor's]
The Atinati weed, which grows on Verd, causes humans to fall in love on sight.
Links: The Doctor is still trying to get to Metebelis III (see The Three Doctors and Planet of the Spiders). Jo recalls Spiridon and is suffering pangs of regret that she did not stay with Latep (Planet of the Daleks). Memories torn from the Doctor by the Norebo Worm and which Jo recognizes include the Brigadier, Yates and Benton, plus the Doctor's previous incarnations (The Three Doctors), Daleks (Day of the Daleks), Sea Devils (The Sea Devils), and Ice Warriors (The Curse of Peladon).
Location: Verd, the wooded moon of Galaxis Bright, date unknown [although Galaxis Bright and Dark would appear to be Earth colonies].
Future History: Galaxis Bright and Galaxis Dark are on the verge of war. An Emperor rules Galaxis Bright, although seemingly in a fairly benevolent fashion. Assuming that they are Earth colonies, they have been established for long enough for old literary classics to have been written there, including the Galaxis Bright play The Tragical and Comical History of Boreas and Thamia, or The Complications of Love. The inhabitants of Galaxis Dark are known as Darklings, and their space craft as Darkships.
The Bottom Line: 'Oh, this is madness!' Talk about a comedy of errors. Dismissed by some fans as badly written, with the Doctor and Jo mere caricatures, Nightdreamers is very tongue-in-cheek and hugely entertaining. It effectively fits in with Telos' policy of providing a different type of literary Doctor Who to the BBC novels, and on the whole is best described as enormous fun.