The Dream Shaker is a fairly powerful weapon that is actually half of the Staff of Dreams. When Tak and Needles fight for the staff, it breaks in half. Needles gets The Staff of Nightmares and Tak gets the Dream Shaker. It becomes obvious that Needles' half is more powerful, and it can open Rifts from the Dream World. However, the Dream Shaker has more magical powers than their staff. After a long chase, Tak gets the Staff of Nightmares and Dream Shaker and restores the Staff of Dreams. After it is restored, the Dream Guardian, keeper of the Staff, returns and takes it back.
There is a small goof in the end. After the staff is restored, there is one more battle with Tlaloc. When Tak switches bodies with Lok, Jibolba, or Dead Juju, you can see Tak holding the Dream Shaker, even though he does not have it anymore. He does fight with his Twark again.