Once Alundra enters the Nightmare, head straight ahead, a short scene will play with Wendell and five Slimes once Alundra reaches the lever. As soon as it finishes, hit the lever, take the route opened up by the block moving, hitting the next lever along the way. Head right and down (the ceiling obscures the way Alundra can take), then head right at the branch, follow the path, hitting the next lever along the way.
At this point, head left at the first branch, left at the next branch, following the path and hitting the lever. Head right, following the path once again and hitting the lever, head up, going under another obscuring canopy and then towards the lever on the left, hit it. Head back down, following the new path, pick up the chest at the left of the bottom path, which contains Herbs, and then up under the canopy, towards the other chest, which contains a Gilded Falcon. Head back right, and under the obscured floor to leave the wooden walkways.
In the next room, the gate locks behind Alundra and eight Slimes spawn, destroy them to unlock the gates, ignoring the switch for the time being. For the next set of wooden walkways, follow the route indicated on the diagram, if this route is not followed, blocks will fall to block the way, preventing Alundra from continuing. If this happens, step on the switch before the walkways to remove them and then try again.
After this, a short sequence with Wendell and the slimes will play, with Alundra having to fight the Gelatinoid. After the boss fight, Alundra will leave Wendell's Dream.