To get here from the Heartlands South Citadel Rock dreamcatcher you should head northeast through the pass to the right of Citadel Rock. You will come to a 4 way intersection with a sign. Take the road towards Fort Wallace. Take a left at the 4 way intersection after crossing the railroad tracks. As you go under the bridge the dreamcatcher is in the tree straight ahead next to the trail.
Finding all 20 dreamcatchers will reveal the location of the Ancient Arrowhead treasure; A unique item that makes Arthur's stamina last twice as long when using the bow.