Badly alarmed by North Dakota, an unreal place (9)
I believe the answer is:
dreamland
'an unreal place' is the definition.
(a fantasy location)
'badly alarmed by north dakota' is the wordplay.
'badly' is an anagram indicator.
'by' says to put letters next to each other.
'north dakota' becomes 'ND' (abbreviation for the US state).
'alarmed' with letters rearranged gives 'dreamla'.
'dreamla'+'nd'='DREAMLAND'
(Other definitions for dreamland that I've seen before include "Nod, perhaps" , "Utopia" , "Sleep; ideal world" .)