Shadow Nightmare

The final boss of Link's Awakening, Nightmare takes on six forms of former bosses Link has defeated in Link's Awakening, as well as that of A Link to the Past. Nightmare is the primary antagonist in the Wind Fish's dream on Koholint Island, and is the force single-handedly responsible for the forced, continued slumber of the Wind Fish.

Giant Bot
The first form is a Giant Bot, which is, in essence, a dark blob. The Giant Bot is the easiest and least demanding form of the set; if Link simply sprinkles Magic Powder on it three times, it will morph into its next form, Agahnim.

Agahnim
The second form is Agahnim, the evil sorcerer from A Link to the Past. This form can be defeated in the same manner as the true Agahnim was in his in-game appearance during A Link to the Past, by playing a grueling game of Dead Man's Volley. Link must parry balls of magic back and forth against this form, until Agahnim tires of the volley and submits to backfire. Similar to the true Aghanim battle in A Link to the Past, some blasts of magic cannot be reflected. After this form is dispelled, it shall transform to that of a Moldorm-like shape.

Oddly enough, if timed properly, Link can also use the Shovel to deflect Agahnim's blasts, presuming Link has not traded it for the boomerang, in a similar manner to how Link could use the Bug Catching Net to do so in A Link to the Past.

Moldorm
The third form will be that of the first boss in Link's Awakening, Moldorm, in technique and in attack strategy. Striking the tail continuously as it rampages about the room, similar to its original incarnation, will accelerate the demise of this form. However, this form may slow down during the battle, and when this happens, Link's entire attack strategy must be repeated in order to deefeat this section of Nightmare. There is also another, more simple way to defeat the Moldorm; as Nightmare is switching forms, from Agahnim to Moldorm, Link may quickly and continuously slash the transforming mold, slowing and eventually halting the process. Only the head of the Moldorm will successfully form, and after more striking, the boss will simply change into its next shape, or at least sustain enough damage that Link will be able to defeat it quickly and painlessly as compared to its full-bodied form.

Dark King Ganon
The fourth form is The Legend of Zelda's archetypal villain, Ganon. Ganon will attack with his Trident, and send a flurry of demonic bats Link's way from time to time. Using the Pegasus Boots and the Sword, Link must charge at the Ganon form in order to defeat it. After it is defeated, it shall morph into the Lanmola form.

Lanmola
The fifth form exists as a Lanmola from A Link to the Past, but is defeated in a different fashion than its familiar counterpart. The Hookshot, Boomerang, Bomb, or Magic Rod will defeat this form. Upon vanquishment, it will morph into the final form, Dethl.

Dethl
The final form is the true form and will be the only new enemy encountered in this battle. Dethl (シャドー, Shadow) exists as a central eye, from which two dark, muscular arms extend outwards. Using the Roc's Feather, Link must jump over the arms to avoid injury once they begin to swing, and at this time, the center eye will be hidden. Occasionally, the eye will open during the battle, upon which Link must strike it with an arrow or the boomerang, each time. Sixteen direct shots with the bow and arrow is enough to dispel this horrid monster, though a single direct hit with the boomerang in the center of the eye will kill him instantly. This form will take the longest, but once it is over, the Wind Fish will awaken.

As well as being a possible inspiration for Vaati, due to the similar central eye and overall form, Dethl also appears incredibly similar to a final boss in the Kirby series of games, also by Nintendo, resembling the Kirby games' popular antagonist "Dark Matter".

Aftermath
Once the Nightmare is dealt with, the Wind Fish will awaken. He will confirm that Koholint Island is a dreamworld, and that Link was absorbed by his dream the moment his ship was struck by lightning while we was sailing. By using the Eight Instruments of the Sirens Link gathered on the island to play the Ballad of the Wind Fish, Link and the Wind Fish finally awaken, dispelling his dream world and returning Link to the sea, from whence he came. Link awakens on a piece of his former raft and watches as the Wind Fish flies overhead. The dream island of Koholint would only remain in his memories.

Trivia

 * Nightmare's final form resembles the Vaati's final form from The Minish Cap.
 * The wanted poster in Ocarina of Time's Shooting Gallery bears some resemblance to Nightmares final form. Though this is not a proven connection.