From the Dread rulebook, they spend a lot of time talking about how to create the horror feeling.
Isolation.
the players should feel as though they can't go for help. the most obvious is the Cabin in the Woods with the bridge being washed out and it's raining. You are stuck in the horror zone. But you can also pull that off in New York City. You can't go for help when you have no proof and it'll make you look crazy and get you committed.
Uncertainty.
Not knowing if your PC will survive is scary
Not knowing what the enemy actually is, is scary
Not knowing who you can trust is scary
Not knowing what is going on is scary
Climax.
In Dread, the point is to whittle the PCs down to the last few survivors. There's no hit points, so you are either alive or dead. In D&D that can be damaging to player fun. I'd recommend adapting it to whittling the party down to few hit points and resources.
So before they get to the final show down, they suffer sabotage, theft, accidents, all staged by the enemy (not accidents). When the party is down to their the last, that's when the big bad shows up, in the dark, smoke, etc. Never let them get a full look at it. Each player is weak, in doubt, and still worried as heck because they don't know what this thing is.
But you'll have your whole party experiencing it. For longer term campaigns, it may not be good practice to wipe out the PCs, but you can still keep them on the ropes every time.