When a Dreamwalker died in a nightmare, their soul was trapped inside the Nightscape forever. However, taking one's own life was a lot different than being killed by Ethereals or dying due to a fatal slip.
A willing act of suicide caused a Dreamwalker's Soul to be deported straight to the Garden of Death. Xander knew this little clause and decided to take the risk of seeking another audience with the Lord of Terror.
As Xander breathed his last, his body turned cold and lifeless. It remained lying in the dirt, near the foot of the burning tree while his soul was pulled into the Garden of Death.
When Xander opened his eyes, he was no longer in his tangible, corporeal form, but a spectral entity surrounded by a halo of pale blue light. He didn't even remember how long he had been out, and everything that had happened right before was a hazy blur.