Our daughter used to have night terrors if she got overly tired (even though she dropped naps at 18 months and was always hard to get down for the night!). We had to really stay on a set schedule for bedtime and watch her stimulation beforehand. Even though it didn't seem like a need as displayed by her everyday behavior, we found that she needed more sleep than her body seemed to demand of her (I now wonder if she might have been over-stimulated and couldn't settle down when she needed too). Stress seemed to be a factor too.
She grew out of the night terrors sometime around 3 or 3 1/2 years. She's 8 yrs old now and takes melatonin every night an hour and a half before bedtime. It has been so helpful! We use the liquid also. Both our grocery store and the local natural/health food store carry the liquid version. I wish we had know about melatonin when she was younger. I think it would have helped her to settle down and go to sleep, and maybe even have avoided the night terrors all together(?!).

I wouldn't go over 5 mg of the dissolvable. It seem to help my daughter go to sleep, but not stay asleep.

DO NOT EVER CRUSH an extended or timed release capsule or tablet - it can literally corrode your child's stomach as it is designed to be broken down over a long period of time and when crushed it is ALL RELEASED INTO THE BODY ALMOST IMMEDIATELY. You can severely injure your child or worse - Please trust this information from an ex-EMT and med certified person.

Our doctor recommended we wake our son up 2 hours after he goes to sleep (when most night terrors start). I wake him up for a minute or two and then he seems to "skip" the night terror. I know it's not always easy to get a child to wake up after you fought to get him/her asleep, but just wanted to share. I find it easier than the 30 minute "freak out" that comes with a night terror. Our son never remembers them in the morning.

Melatonin is dosed more by weight, not age. That being said, that is more than likely way too much. My five year old is dosed at 3.Different brands, at least for us, sometimes yield different results. Liquid also seems to work better for us.