I don't believe in demons, but I think if your wife is having the same powerful dream over and over, there's probably a reason for it.
Indeed, BIll, one must try to understand that reoccurring dreams as designed to get ones attention. Becoming frightened by such dreams will not help the individual very much and in fact could drive them away from resolving the situation.
Why do your in-laws think it might symbolize an ancestor? What do they think it means?
It is most likely because they don't have the foggiest ideas of how to deconstruct a dream and discern the elements behind the symbolism. In those terms, their thoughts on the matter could simply aggravate the situation. Personally, I would not listen to the thoughts of anyone who suggests that this is due to an external influence.
The boy doesn't seem to be trying to harm her, and he "lands her on her knees," which for some people is a posture of prayer.
It is also a position of abject servitude. It is not an especially promising symbol. In essence, psychologically speaking, the dream element is bringing her to her knees. She is so traumatized by the realistic nature of the symbolism that she is not able to decipher why that is.
What does your wife think it means?
This is the key. It doesn't matter, in the slightest, what others think or decide this dream means. The wife can determine the elements involved if she is ready to take a long cool look at her personal behavior and her belief structures.
My advice,
if she can muster the strength, is to freeze the dream at the point she is on her knees... and slowly get up, stand tall and walk away.
This sounds simple enough, but under the circumstances it will require a Herculean amount of effort on her part. In essence, she needs to break the cycle and depending on what precipitated the dream, that could be far easier said, than done.
This very thread is one of the reasons I penned the thread,
Dreams, dreams, dreams.
For anyone who is actually interested in dreams, please drop in and tell me your thoughts.
My guess is that the distinct lack of interest in the thread is perhaps one of the reasons why people don't understand dreams.