That's odd. Sounds like you had a couple of things going on there. Slamming into the limit stops is probably a bad or incorrect driver. The rest of it sounds like a bad all around machine and a good choice to send it back. I haven't had any issues with mine with the exception of the heater power cable decided to burn through. The new one showed me that I was not the only one as they changed the design on the plug.
The real pain with the dreamer is finding spools the correct size if you want to run them inside the machine. I run non-standard spools outside the unit and feed it in. If I were to buy another one I would opt for the creator as it's cheaper and made out of metal.