To see the grim reaper in your dream signifies the negative, rejected aspects of your personality. It represents aspects of yourself that you have repressed. Alternatively, it symbolises death. The dream may parallel an end to some situation, habit, or relationship in your waking life.
To dream that your friend has turned into the grim reaper implies that your relationship with them is dead. Your friend has changed into someone that you literally do not recognize anymore. Something has changed in the relationship.