By sprinkling monster dust, you have confirmed the possibility of monsters in her room. Be patient, it is normal at this age to think about monsters etc.
Be sure there is nothing on TV to reinforce it, nothing in her picture books etc. Be kind and patient, and tell her that you understand how she feels and what would she like to do about what she is feeling. A light on, a dog on her bed, what would make her feel safe (of course reassure her how safe she is)? Allow her to have some control over the situation.
A lot of it stems for daily stimulation, the fact that she is tiny and has to be in a room by herself when mom and dad have that big cozy bed.
My unpopular answer would be to get in bed with her until she is asleep.
And I know this is hard, but she will outgrow it.