There are many nights my friend stays with me overnight and she has nightmares many nights. I personally do not wake her up during a nightmare, I talk her through the nightmare.

Letting her know she is not alone, she is safe, etc. I repeat this until she either calms down or wakes up. Most of the time she can then continue to sleep, at least until the next night mare :-/

If she does wake up, then I offer to talk with her about the dream. Sometimes she wants to, sometimes she doesn't. Also, her day is affected by her nightmares, alot of the time she just wants to isolate and not leave the bedroom/bed.

nlk