Reality or Dreams

This is in the form of a terzanelle, if anyone is familiar with the style then I would appreciate feedback on the form of the poem and whether I have got this correct. Thank you

We’re huddled under the sheets,
our thoughts and minds are array,
as reality and dreams compete.

In our mind, a colourful display,
it seems so real until the pinch,
our thoughts and minds are array.

At first, woodland, in the trees a finch,
it’s dark shadow is cast on the ground,
it seems so real until the pinch.

Eyes on our back, we glance around.
Nothing there. But our instincts are screaming!
It’s dark shadow is cast on the ground.

We try to run, but our feet won’t move, then,
we’re huddled under the sheets,
nothing there. But our instincts are screaming,
as reality and dreams compete.

I'm not familiar with the style, so sorry for that, but it is a good poem. I really like the whole theme in general, and I think it was a cool idea. There were some lines I loved and others I wasn't too fond of, but if you're trying to follow some specific style then you might need to sacrifice better wording here and there; while generally I hate when people do that, nothing wrong with challenging yourself either by trying to go with some specific form.
Anyway, I thought this was a good poem.
Keep writing,
~StoryWeaver

Terzanelle~! Ever since that event, I've come to love terzanelles; they're so much more variable (for lack of a better word) than villanelles.

our thoughts and minds are array,

This line doesn't make much sense. How can a mind be array? Also, "are array" is a bit of a tongue twister. I think "our thoughts and minds in disarray" works and makes more sense.

You've got the form down pretty well, I thought, and aside from the one line that didn't make sense, all the repeated lines worked well. Your punctuation was a bit off (you often had commas where periods would be more grammatically appropriate), and having proper punctuation would strengthen this poem, I feel. You could also potentially play with the punctuation a little in the repeated lines to enhance or give them a slightly different meaning each time.

One thing I noticed as I was reading this was that the line lengths were a touch irregular. If you could even them out, the poem would flow much better.

Thanks to you both, I will address those issues when I get time.

~Lydia