I haven't really been discriminated against because of who I am in my dreams, but I've seen what it can do to a person when you start judging them based only on a world neither you nor that person are from. It's just my opinion, but I don't think turning someone into a villain here because they are in their dreams is going to do anything but make a self-fulfilling prophecy.
I'm not saying it doesn't hurt to be cautious, especially if you don't really know the person. Dreams aside, sometimes people are just bad people. But I think that you have to at least give them the chance to show you what kind of person they are before you turn them into a monster.