Seraph's Nightmare was formed by the crew Children of the Damned following their leaving of the flag Rogues' Pact in October 2004. Eventually, all but one of the former crews of Rogues' Pact joined Seraph's Nightmare, and Hephaestus' Forge was transferred to Seraph's Nightmare. However, aside from the change in name and loss of a crew, there are other differences between the two flags. Seraph's Nightmare works as an autocracy, opposed to Rogues' Pact, which was a representative democracy. Seraph's Nightmare also dropped the Crimson Tide alliance, instead choosing to not be part of any large alliance.
Seraph's Nightmare later acquired two crews not involved in the events of Rogues' Pact: Thicker than Blood and Corsairs of Umbar. Thicker than Blood remains in the flag, though Corsairs of Umbar recently joined Unity.