What causes children to have nightmares?

Some studies have shown that most of our dreams are unpleasant. However from what you have described of your life, nightmares make a lot of sense. Our dreams happen as a result of our brain making sense and organizing new information. If you had large amounts of stress and anxiety all the time, it would of course be integrated into your brain as you slept, and you would experience anxiety. Now when there is nothing to be afraid of and we experience anxiety our brain identifies something to be afraid of, in your case nightmares. Hope I didn't talk too much in circles, it has been a long day.