Judging from the scenario, it could be night terror. I got a similar situation too and I though my DD got possessed by dirty things, even gone to extent of placing a glass of water at the corner of the room to test (anxious parents); in the end turn out to be nothing.
Mine woke up, started crying non-stop at 2am every night. Realised she probably felt in-secure, everynight standby her side until 3am to ensure she does not cry... when she does, just whisper into her ears that mummy is here and pat her back to sleep, it took me a month to ensure the situation does not repeat again.