HEre's how the dream went.

It started with Sunset Shimmer falling behind on her grades, and she begins to panic.  Under my avatar Danged Spell, I volunteer to tutor her in getting another A and redeeming herself in the eyes of the teachers at school.  But one day on the big test, something goes wrong and Sunset turns into her Demon form for no reason.  She even struggles to get control.  Twilight and her friends were able to break her loose.  But the school board demands that Sunset Shimmer be expelled, unless the Principal were to lose her job.  This causes Sunset to return back to Equestria in tears.

As the Twilight of Earth and the others ponder a world without Sunset, I learn who was behind it: Cozy Glow: Super Intendent Neighsay's daughter and student of Canterlot High.  I try to help her, but she loses control and fires some sort of magical beam right at Principal Celestia and Vice Principal Luna, turning them into Daybreaker and Nightmare Moon.  They go at each other like hate was in their eyes.

Without a second thought, Earth's Twilight contacted Sunset and convinced her to return to save the Principals.  Meanwhile, I try to comfort Cozy Glow and get her to stop attacking other uncontrollably.  When Sunset returns, she is overpowered by both corrupted principals, with the students and teachers of both Canterlot High and Crystal Prep getting battered down.  It takes Sunset and her friends all their magic to save both Principal Celestia and Vice Principal Luna from their nightmares.

But as everyone celebrated, Super Intendent Neighsay came by, furious by the damage both Celestia and Luna did, and even more furious that Students and Teachers of both Canterlot High and Crystal prep got involved.  By his and the School Board's orders, every student(Including myself) of Canterlot High and Crystal Prep were expelled from the school system, every facility member fired, and both schools were shut down.  I called out the Super Intendent and even pointed to the neglect he caused his daughter, even going as far as to expel her, who apparently is ashamed at her father.  But Neighsay turned the other cheek as if he had lost his will to love.

With both schools shut down, magic is now completely unchecked.