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When I ask her what she is afraid of she really can't tell me. I think it is the fear of waking up in a dark room, feeling alone, or getting disoriented.
I had her drink warm milk before bedtime...that really seemed to help. I put soft night lights around the area where she sleeps...that is good for safety, too. If your father's doc. says it's okay, he could have a glass. Limit all caffeine intake well before bedtime. Keep him as active as possible during the day so he will get a good night's sleep. Other than an occasional OTC sleep aid, I would not want my Mom to use a Rx for sleep.
It is scary to see your parent in such a panic state.
My heart goes out to you.
You should go with him to his next appointment & speak with his MD on it. These are all symptoms of anxiety as well as dementia.
My mom is on Remeron - an old-school antianxiety & anti depression drug - it has been an immense help but it has to be taken every night for at least 2 -4 weeks to build up to see the effects. Sleeps better and has the plus of weight gain.
For sundowners you kinda have to do things to remind them subconsiously that night is night and day is day. What I did was to place torch style floor lamps with timers in her rooms. They went on at 5:00 PM/before dark and off at 10:00 PM and go on at 8:00 AM - 10:00 AM - so that if the weather is gloomy in the morning it still is "daylight" inside. I did this first on table lamps but she would go and mess with them. For whatever reason the torch style, she doesn't touch!
This is not going to get better but only start happening more & more for your dad. A set schedule is also important - if there is a TV program or set community activity he needs to get reminded about it with a calendar, big Post-It sign or alarm clock that goes off before the event. So he get's trained that it's something he needs to do. For my mom, the food network every afternoon was it. She would even set the kitchen timer when she went to lunch at the IL so it would ring for the 2:30 shows. I think alot of this was that she was familiar with what they were doing and saying - she's never asked to go to the store to get ingredients or anything like that. A friend of mine dad can sit through hrs of those home repair shows on HGTV.
For those that did gardens, going thru seed packets or plant catalogs and helping create a garden on paper. If they sewed, going through buttons and notions to finish off a blouse. For sewing stuff, these are for cheap at thrift stores as hardly anyone sews anymore.
What one of the activities gals at her IL told me she uses as a resource is the cub scouts belt loops workbooks. Seems it's about the same level of dexterity and attention span with the elderly as a lower school elementary boy in her experience.
Yet, mom still talks about moving back to her house, which is up for sale to provide the bill-paying for her AL. I reinforce to mom the reason that she no longer lives alone and the advantages of having a nurse or aides around to care for her when she has anxiety episodes. Mom has many weekly visitors, including myself, my sister and my brother---as well as friends.
Despite all of the good things about AL, mom still gets "nervous", as she calls it, when evening is coming. She gets ready for bed and gets her night-time meds around 7 pm. She then waits in the living room with the TV and other patients, until she feels sleepy, and then goes to bed. Mom gets a low dose of Xanax in the AM and PM, with a low dose of Buspar in mid-day (it doesn't cause drowsiness) to tide her over between the AM & PM meds. This seems to help.
Good Luck, whatever you do for your parent. It's sad to see our parent scared like a child, but it happens frequently. Do what you can but take care of yourself---it is a draining situation--and you can't help your parent if YOU get sick!!