Ash and friends (this time accompanied by newcomer Dawn) arrive at an idyllic village on their way to their next Pokemon contest, where chaos will soon erupt with the prophecy of two Pokemon Gods (Dialga and Palkia) and the arrival of a mysterious, seemingly deadly Pokemon named Darkrai, which has the power to distort space and time.
Characters make long jumps and fall off out of hot air balloons, but survive every time. There's a flashback sequence where a kid falls off a cliff and she would've died if she hadn't been saved.
Ash wakes up a hospital after his nightmare. There's also a temporary medical center set up in a pretty average building, with Pokemon being treated medically.
Pokemon get trapped in their dreams and start flying around as ghost-like apparitions. They fly through walls, etc, but the Pokemon are fine in the end.
It's not technically torture, but several Pokemon are trapped in scary dreams and are clearly suffering. Ash, too, is trapped in a scary dream at one point.